I have been trying to get some more information on the new loan modification agreement that California Governor Arnold Schwarzenegger has worked out with Countrywide, GMAC, Litton and HomeEq .
This San Francisco Gate article has been all I can dig up that had some facts about the details.
While I am excited about this new agreement, I am also cautiously optimistic. Talk is cheap and there has been a lot of lip service lately. I have seen too much doom, to all of a sudden start whistling dixie. So, I’ll wait to break out the party supplies until later.
As they say, “The proof is in the pudding!”
With that said, I wanted to make sure that I posted the details for my readers as they are revealed. Here are some key points of the new deal.
- If you have a mortgage through Countrywide, GMAC, Litton or HomeEq, you might qualify to have your introductory interest rate temporarily frozen.
- To get help, borrowers must occupy their homes, have made their payments on time and prove they cannot afford the loan’s new rate.
- Agreed to maintain the initial, lower interest rate for some subprime borrowers whose rates are scheduled to jump significantly higher.
- To qualify, borrowers must occupy their homes, have made their payments on time and prove they cannot afford payments with the higher interest rate.
- The word that was chosen is it’s for a ’sustainable’ period of time. (no definite fixed term as been proposed)
- Larry Litton Jr., chief executive of Houston’s Litton Loan Servicing, said his company plans to expand the initial interest-rate period for up to five years.
- The lenders also said they would streamline the process for determining who gets the loan modifications. The companies also agreed to provide regular reports to the Department of Corporations on their efforts to reach out to consumers and on how many loan modifications actually occur.
Paul Leonard, California director for the Center for Responsible Lending, an advocacy group had this to say about the governors landmark deal. “Overall I am extremely pleased that the issue of foreclosures is squarely on the governor’s radar screen and that he seems to have extracted some important commitments from some very significant loan servicers here in California.”
He then made this comment that I thought hit the nail on the head and will be the gage to see if this is just lip service or the real deal.
“That said, the devil is in the details. The monitoring and reporting on the process is critically important.”
Amen Mr. Leonard!
Larry Litton had this to say, “Freezing the payment rate makes economic sense for the investors who own the mortgages as well as for the homeowners. Property values are falling dramatically, primarily because there are so many foreclosures already on the market in some areas.”
Litton also said this, “Clearly, it is not good for our investors to have the real estate back. It feels like a no-brainer for a loan servicer to keep the payment where it is, keep another piece of real estate off the market and keep the borrower in the house.”
I would like to think that it’s a no-brainer Larry, but that hasn’t been the case so far.
“With this type of cooperation from loan servicers, we can save tens of thousands of people from being added to the foreclosure lists,” the governor said in a statement. “This common-sense approach does not involve a government subsidy or bailout.”
I would like to hear back from homeowners that have any of the above named lenders or loan servicers. Please give me any feedback or stories, so I can report what really is going on.
loan modification free foreclosure help foreclosure questions
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No 1099s? I’ll be the IRS would love to get ahold of that. Wonder how many brokers dodged taxes over the last 20 years. That alone could pay for the Iraq war.
This will be ugly. What Countrywide needs to do is come clean and get their acts together or many exec’s will be in a federal prison next year. Guaranteed.
CW`wholesale will fold within a few months. A.M. knew what kind of mess he was creating, why else would he sell shares. He’s worse than Martha ever was.
The distinguished Senator should ask Guerillo if Countrywide paid it’s own retail force “extra” compensation called “overage” to sell higher rate products and loans with prepays. This constant bashing of brokers by dropping YSP innuendos is really old and in my opinion immediately identifies the questioner as someone with a low Fico business IQ. What the broker world calls YSP the banks call overage – and there was a lot paid by CW to it’s own retail sales force. It would be refreshing to hear someone ask the major lenders to run some reports detailing retail loan officer revenues. Also, when is someone going to wake up and ask Guerillo and FNMA about one of the highest volume products originated by CW and sold to FNMA – the infamous Fast and Easy which is really a “liar’s loan”. The whole industry knows about it but no politician seems willing to ask CW or FNMA about the performance of that particular product which was so crucial to inflating the California market. Bet there are a bunch of buybacks fixing to show up within those F&E securities and no one seems to understand FNMA was buying an Alt A or sub prime product clothed in A paper disguise. Oh well, some industrious atty will get to it someday.
Mr. Schumer how come your not asking how brokers/bankers are getting paid almost 5% in yield spread premium on FHA loans. This is a government backed product and yet offers the highest paidyield spread premium. Also, Mr. Schumer how come your NOT asking why credit card companies are charging 30% compounded interest and heavy late fees. These are the companies that made Americans refi every year to pay off debt. Mr. Schumer how come you are NOT asking why Americans have to pay triple for mortgage payments in a five year span which is creating the recession. How come your NOT asking why Americans you were mislead during the dot.com bust that evaporated their life savings. Mr. Schumer where were you and your friens the last 10 years Americans have been cleaned out by Wall Street big players. Mr. Schumer we all knew what was happening in the real estate indusrty. Those who didn’t know are either stupid or need to lose their position. So, my question is where was everybody when all this was going down.
Been in the business for 30 years and ended at Countrywide. While I must say that the very top managers were pigs and worse than anyone I ever worked for and Mozelo was selling us out as employees, the loans were just the same everywhere. The companies quit paying us high salaries about 8 or so years ago and made us earn our compensation in YSP. At the same time they were making money on the back selling all the loans we wrote within 48 hours to the stock market. They got off scott free. No payments to employees and money on everything we wrote. I do know that Mozelo selling all his stock while CW was burning will get him the Enron purp walk but as to compensation for others, the companies price and sell mostly the same. They all pretty much leave the income producing to whatever the salesman wants, they don’t care if we make any money or not. That is probably why you will never get to the bottom of this snake tank.
I guess selling any product at a higher rate will have to end as far as the Senator is concerned. Buying a car where the sales man tries to get the highest price possoble in order to earn commission is the same way mortgage brokers are paid. How come no one is mentioning anything about the car business or any other business for that matter??????????
I think this is a GREAT START! He needs to ASK All the Mortgage company’s and the servicers the same 10 QUESTIONS. I wish he would Aks Ameriquest the same QUESTIONS.
He needs to Learn about Mortgage Servicing Fraud, It is as BAD as Predatory Lending. Predatory lending seems to be the start for Mortgage Servicing Fraud in some cases. Check Out Mortgage Servicing Fraud dot org to find out more, we are there Fighting for our homes and RIGHTS!
I posted a link to this site there. And a copy of this great article.
Hi Moe, You sure have a GREAT web Site!
Thanks
The questions from Senator Schumer will most likely be met by broad stroke figures that do not accurately reflect what is happening on the front lines. I am surprised that Congress cannot get their hands on the “real” story. Everyone in the mortgage banking business knows waht a Yield Spread Premium is versus an “Overage” on the Retail lending side. Having worked for Countrywide in the past, I too was paid a “commission” on increasing the rate to the borrower above and beyond what Countrywide told me I had to charge someone. Loan Officers in Countrywide branches were paid 50% commission on any “overage” at that time. They were also paid another commission as a percentage of the loan amount commonly referred to as “basis points”. These basis points averaged about one-half to three-quarter percent of a loan amount. As far as FHA, once again, EVERYONE in the mortgage business knows that FHA pays HUGE! The proof is right on evryone’s rate sheets. All Congress has to do is get some rate sheets and they can see this is true. The bottom line is that lenders such as Countrywide, Bank of America, Wells Fargo, Chase, Citi, etc. get to HIDE their revenue made from loans due to a loop hole in the system that essentially states that since they are FDIC labeled they need not disclose compensation earned. As if that isn’t crazy enough, NO ONE HAS EVEN MENTIONED SERVICING RELEASED PREMIUMS! What’s this you may wonder? This is whereby lenders like Countrywide earn even more money on loans when they sell the loan in the secondary market known as Wall Street. This compensation can add up quick. And finally, how about the servicing dollars earned each year on the overall portfolio? This tacks add even more profits. Ladies and Gentlemen, this industry is awash with nothing other than semantics and greed. Everyone is pretending they don’t know a thing when all they need to do is ask. You know why they don’t? Here’s why – THEY CAN’T HANDLE THE TRUTH! Jack Nicholsan would be proud.
broker kickbacks
the rabbit hole is deep…
The Fast and Easy loan as I understood it was based on FICO scores of 680 to a certain LTV and 720 for a higher LTV, so there are not an ALT A or Subprime product. Just an F.Y.I. for you!!!
i am with ya adam. i think to put it in a nutshell.. the only people that can truly grasp what was taking place (during the 7% pool of loan spread days) are the ones that were in the trenches. each trench has a unique view of the same story… but if you werent in the trench with the masses… looking at 70 to 300 loans a month. then you will never understand.
The Fast and Easy product is a Stated Income/Stated Asset (SISA) doc type which is classified by anyone other than CW as AltA. Even FNMA calls these flow AltA in their contracts. Ask CW how they handle the 4506 document on these? That is interesting as well.
The Fast and Sleazy product was priced to high for an l/o to be competitive…so an L/o submitted it as a reduced doc loan and “in-house” underwriters approved these after passing a very grey “reasonableness” test…you had AM/PM minimart managers making $110,000 a year
The problem is that none of these corrupt senators own stock in the mortgage brokers, and they are all probably on the board of directors of the large banks. With the broker industry unable to get together any type of solid front, the banks are always going to control the loopholes.
Some practices in this industry are far from consumer freindly (like overages). The best way for us the fight it is to sell against it. The bank I work for doesn’t pay overages – never has. We’ve not been able to attract some good LOs because of it (personally I like to sleep at night). I’m out there all the time telling people to avoid lenders who pay overages to their LOs. How can you be sure you are not getting taken unless you are dealing with someone who does not have a financial interest in the choice you make? On the other hand, some loans (like FHA) are inherently more risky to the lender. They require more cost to service and have a higher risk of finacial setbacks after closing via indemnifications, interest recasts, etc. I don’t have a problem with a lender trying to offset additional costs by pricing the loan product differently up front (as long the differential is consistant). The trouble you get into is when you price one loan differently than another when they are the same product. As far as a service release premium goes, that has nothing to do with pricing. It is simply the upfront estimate of the anticipated servicing value of that loan. There is nothing sinister about taking an assett that will accumulate profit over time and placing a value in immediate benefit that you will pay for the privilage of earning that profit. Don’t muddy the waters with needless “lender bashing” when we are really trying to shine a light on some definate problems that need reforming.
Answer to #10, 1099 forms. As I understand tax code, 1099 forms go to individuals not a Corporation. If a broker has a TIN than no 1099 form. All the investors I work with require a broker to be a Corporation. I don’t do business with Counrtywide, I don’t like their business model.
Great points today made about YPS and overage. I worked as a PA/originator for a regional officer and branch manager in the past at CW retail division. The bottom line I believe is the politicians and the media do not want to ask or disclose banks profit (overage) on certain loan product because the consumer won’t trust the bank if they really knew the playing field.
I was hired by CW because I had a DRE license and off the hook computer skills. When CW came out with their “ADVANTAGE” origination system I was the first to crack the software program before it was mandatory for all retail loan officers to use. I’m sure some of you ex or existing employees can identify with the software origination system used today that shows the overage.
Quick story: Early in my employment phase I mentioned YSP and the branch manager pulled me to the side and said “please use the term overage or shortage because we do not want any loan officer knowing about YSP.” Keep in mind CW likes to higher inexperience loan officers to keep the power in their hands.
For the AE’s in the industry dealing with loan officers in wholesale! You know when you went to most of the brokers place of employment you pushed the most profitable products that paid you the most basis points. Only a true professional seen through this tactic and served the clients needs not your interest for aligning your pockets!
My point: Form what I have seen in this industry it sickens me the problem is so bad a politician can’t fix it because the politician is just taken the temperature on this issue with their finger!
I have been to all areas at CW and most of the employess have never seen all levels of the corporation to know how it all works when a file is funded and closed, then sold…I have. Also, I knew what the branch made on the products all loan officers sold to consumer working with regional and the branch manager. If I told you what they made you’d realize not only that you are the small fish, but you’ve been pimped to the fullest with no vaseline!
Kidz be nice to each other,
As a former employee (salaried) of Countrywide I would hope that people were a littl more ethical then what I keep reading and maybe it is very regional. I worked with an excellent staff of underwriters that were very critical and very detailed when it came to stated income. Many underwriters were trained to use salary.com or another way to determine the actual salary. They had no problem denying loans. As for comepensation I really think all loan officers should be salary. It keeps you honest. When a loan officer can make $4,000 on a loan they are going to do just about anything to get it. People also need to realize that borrower’s signed their application stating they acknowledge that all of the information on the application was true.
I agree with Adam regarding the bashing of the Brokers. Inside sales, underwriting made internal changes on many SISA loans to make the deal work. Also, he has the wrong agenda reference to YSP Countrywide might have paid their employees extea to sell these bad loans to brokers but generally “high risk” loans were a cost to us they hit us with a loan level price adjustment or technically a “hit” to the rate. This should deter the broker from selling these loans but due to MEDIA and uneducated advice from neighboors and friends everyone wanted these types of loans even when you tried to talk them out of it. But the consumer is always right and if you don’t give them what they want they will get it somewhere
I think we should be talking about abuse of the system. The products that were abused were few. Option ARMs, IO products and subprime. 5 years ago only the “High End” buyer or client could get these products. LTV’s were low and FICO scores were high. The industry turned these products from financial planning tools to affordability products qualifying clients that should not have been using them. 580 score 80/20 IO 1 day out of BK. Come on!!! We can spend all day blaming someone else but we are all to blame and since WE did not regulate ourselves WE should not be surprised the government is doing it now. This isn’t about YSP, SRP’s and overage, it is about GREED!! So as an industry I think we should fight regulation but we have to accept the fact that more regulation is coming.
I agree Markie!
You also have a great website. Email me when you get a chance about your plans.
Yes they required high Fico’s and they were always described as a FNMA, A paper product with reduced documentation. But what really has happened over the past 5 years is every retail loan officer for CW that needed a stated income program, instead went Fast and Easy. Better pricing. CW constantly warned their retail group to quit running F&E’s thru underwriting over and over again, increasing the income each time until they got an accept – but nothing ever happened and they all kept doing it. Also every broker in America knew you could go F&E instead of stated. So while there were a lot of full doc A paper customers who went F&E, there were a ton of stated income borrowers who were steered to a F&E instead of a stated. Last time I checked a 95%, SISA loan in California or Florida (even with a 680 Fico) should have been called Alt A or even Subprime, not b/c of credit but because it was a 95% SISA. Final point – what will the F&E’s in a declining market perform like – an A paper FNMA loan or more like a sub prime or Alt A loan. I believe the performance of these A paper loans will be a long term, huge hit to CW and I am still amazed no one has asked FNMA about it – 680 Fico or not. Today – would you like a 95% SISA with A paper agency pricing? You know where to find it – CW Retail.
Mozilo should be jailed. The last company I worked for, Countrywide Alternate lending a full 1% judt for loan approval! Get the bastard out of the business!
I should have said EXRTA POINT just for a loan approval !
Everyone is mentioning the YSP on FHA loans. FHA loans have always paid more YSP and always been a much better option for the borrower….I have done them almost exclusivley for years….but I don’t understand why more LO’s/Broker’s did not use them. Only until recently has FHA become a “great loan”. It’s always been there – right in everyone’s face.
Nicole,
The reason that FHA was not being offered was because of a few issues for brokers.
#1. FHA loans are quite a bit harder for the typical LO to handle. Why take a client FHA, when you could take them subpime 2/28 stated/stated all day and close in 7 days? FHA went away when these programs became the item to pedal.
#2. FHA requires brokers to put skin in the game, get their Eagle, pay money and opens their operations to the “government” audits. Scary and NOT good for unscrupulous brokers and no big deal for legit ones.
Hell, take it to Countrywide, AE submits, call your buddy who’s an appraiser, open title and escrow with two hot chicks you send your biz too, hand the file to your processor and BAM. 7 days later you have a $12,000 check and money to burn.
NEXT………….. Rinse and repeat and then call them again in 6 months or so.
Hell, $7 grand, I saw 18 year old kids pulling in $30,000 checks selling Countrywide Option ARM’s all day long.
The golden state. CW loves lending money here. They have over 3,400 REO’s here. A LOT!
Was the lack of 1099 due to the “broker” being a correspondent? Wholesale and Correspondent are two different animals in the same pea pod.
AS you know, correspondent brokers have warehouse lines, and draw docs and fund in their own name. Then they sell to the correspondent lender who then sells to xyz. The 1099 notices may not apply in these cases.
I may be wrong, but just thought I would bring that up.
Was the lack of 1099 due to the “broker” being a correspondent? Wholesale and Correspondent are two different animals in the same pea pod.
AS you know, correspondent brokers have warehouse lines, and draw docs and fund in their own name. Then they sell to the correspondent lender who then sells to xyz. The 1099 notices may not apply in these cases.
I may be wrong, but just thought I would bring that up.
Oh the ever so clever correspondent “special” relationship. Isn’t this used to circumvent the “law” and use “loopholes” to get “paid and not “disclose” these fees.
That sure is a “way” to get around a “1099″.
I see the blame game at its best right now! The truth is government is responsible for guidelines. How can government make rules, regulations, and guidelines with out knowing definitions in the industry. It throws out terms like brokers, independent brokers, ysp, yield spread, compensation, overages, sub prime, alt A, A paper. As you can see most brokers can’t even agree on these definitions. Define “win” the war on terror!!! When we talk we are suppose to know the definitions of the words that come out of our mouth. There is a place we can look these definitions up. Why is it in the year 2007 we still don’t have uniformity in all 50 states. This is suppose to be one of the most important financial decisions in an individuals life time. We have eighteen year old kids coming out of high school being coached on how to rip the customer off and giving this eighteen year misleading definitions on certain terms. How is it that some brokers still are charging $2,000 in what I define as junk fees and yet that same broker calls them administrative fees. Lets face it we are all nervous about the new laws during an election year because we know they will be ambiguous. These definitions should be black and white, uniformed across all 50 states, and have the best interest of the client. I am busier than ever right now because I did the right thing for many years, and teach seminars on the mortgage industry once a week. How ever it makes me furious to know many loan officers that I trained and became good friends of mine left the industry because they couldn’t compete with dishonest brokers. I am surprised that most of you think Mozillo will be going to jail. The government put Martha Stewart in jail for a minor infraction compared to what Mozillo has done publicly on a regular basis. If he goes to jail there goes CW. If that happens depression is next. The truth is the government tolerates him because they can’t afford not too. I want to leave you with some common expressions. I bet each one of you will have totally different definitions on each one . This goes to prove my point you can’t make rules of a game without definitions that everyone understands. I bet you all play Monopoly a little different. I bet some of you actually get in to little fights. That is a game, our industry is for real. Government needs to define themselves better add enforce their rules better.
“Best interest of the client” “cash out deal” “Points” “Broker compensation” “Rebate” “Sub prime loan” “Alt A” “No doc” “Predatory lending” “High cost” “Consumer Benefit model” ” Fees!!!” “Disclosures” “Broker” “Loan officer” “affiliated loan officer” “Gift” “Lender Fraud” Chew on this for now!!!!
What a coincidence that Sen. Schumer is only asking Countrywide these questions. You see Countrywide has not been a contributor to his personal Senate War Chest (tisk, tisk), as these others have been. Why isn’t he asking any of these companies (who all benefit financially from every kind of mortgage as Countrywide does)- similar questions?:
SOME SCHUMER CONTRIBUTORS:
(According to http://www.opensecrets.org)
1. Goldman Sachs $350,850
2. Citigroup Inc $227,550
3. JP Morgan Chase & Co $195,900
4. Credit Suisse First Boston $191,294
5. Morgan Stanley $186,500
6. Bear Stearns $154,250
7. Merrill Lynch $125,100
8. Lehman Brothers $107,000
9. Bank of America $66,000
You are All Heartless People, Dont you know that he has 5 kids (I think)and 9 Grandkids (again I think)he has to Feed and put a Roof over….You are All Shameful. Bad Bad Bad… Mozilo please send Cash no Checks…
Thanks Moe, It’s not my web site, But It sure is a good one. I am Thankful for the people there that helped me Fight Ameriquest and HSBC. I won and lost against Ameriquest at the same time. I’m Still fighting them and will be for a while I guess?
I don’t have your email address Moe, Here’s mine Markie8611@aol.com
What is bothering me is that blog established before crises of the mortgage meltdown informed us that the balloon was going to blow-up and no one did anything. The Senator Schumer wants to attack CW & lenders,when in fact the investor (WallStreet) was the one buying the 580 no credit,no reserve,1 day B.K 80/20.Now that the country is in a recession because there is no jobs out there the investor is not buying any loans,which has created this mess. Also the Senator should be asking the same related questions to the auto dealers that also get ysp from banks,even when they are promoting the 1.9% dealer financing.Why be they make more commission on the sales.I have been in the mortgage business for over 22 years and the abuse that I’ve seen in the last five years has destroy our business. Again greed play the biggest role, because if Lenders and Government really wanted to stop this”FRAUD” it is very simple to do just have every borrower signed a 4506 upfront and if they make the $7,000 to $10,0000 per month,then make the loan. I still visit broker’s office that are making up jobs,fake pay stubs, and flips that are closing the loans with Wells Fargo,CW,Suntrust,Flagstar & IndyMac. These are the same subprime borrower going fannie & Freddie, so the balloon well burst again in 2008.
OH Gee’s That Fig’s
This below looks like a tee-shirt link but it’s not, This guys is fighting Fairbanks SPS. The are trying to take his home useing forced placed insurance Fee’s and other sticks the Mortgage Servicers are trying on People that don’t know any better.
http://www.getdshirtz.com/
I think JP Mortgage/Chase is helping Ameriquest comitt fraud useing Predatory lending, Servicing Fraud and Pooling Fruad.
Thats just my 2 cent’s… No help from the GOV!
Why is Senator Schumer only asking Countrywide these questions, when Bank of America,Chase,Lehman, Ciitbank etc all benefited and produce the same type of loans. CW did now force the borrower to take arm products. The borrower saw potiential to make money and got the 2/28 product.Now that the market turned and the loan is going to reset to an adjustable, they want CW to convert back to fix due to market conditions. Imagine if every lenders try to adjust every adjustable product made in the last 3 yrs. It’s will not happen.
I believe that Fairbanks is involved in a class action lawsuit for predatory lending practices due to force place insurance, so some people might be able to save their homes.
1099 are issued and employees are paid W2. CW has helped over 21,000,000 customers buy and refinance property since they started. You obviously don’t know much about Mortgage Banking or Countrywide
Can you spell Loan? Don’t jump on the wagon and throw darts – do something to make a difference (like not blogging)
Senator Schumer is trying to make himself look like the savior of the general public. In actuality, he is going to make it worse for the general public. CW is a business, just like any other business. You think Wal-Mart doesn’t mark up their product? If the gov’t wants so bad to police the mortgage market, then why don’t they start lending money directly to the public at discounted rates as it does for financial institutions.
If you want to investigate CW – check out the “Tan Mans” stock sales. That is something to look into.
You obviously cannot read. Senator Schumer wants documentation regarding the accounting advice given to CFC as to why they did NOT issue 1099’s to independent mortgage brokers of CFC. And how many of those 21 million people were screwed over by CFC with Option ARMs and other toxic mortgage products and have either lost their home or will be foreclosed on in the next few years? CFC will most likely go bankrupt and hopefully Mozillo will end up in prison.
You do NOT understand the tax code. 1099’s are to be issued to Individuals, Partnerships, LLC’s and Corporations. Here is the link to the IRS documenting this fact:
http://www.irs.gov/efile/article/0,,id=98114,00.html
Someone doesn’t know the tax code, 1099’s are not required to be given to corporations. I believe all broker’s the CFC deals with are corporations, therefore no 1099’s are required. Amazing that the Senator doesn’t know the law he passes. Maybe they just pass gas.
Has anybody really been paying attention the past 4 or 5 years ? Where do think make of the “Mortgage Meltdown” and “Credit Crunch” started ?
How many of you remember, before all this occurred, that the Bush administration public ally stated that it wanted to help more Americans archive the “American Dream” of Home Ownership ? Well, with most Americans, even at that time being over extended, and cash poor, a plan had to be created. Shortly thereafter, all these crazy no money down, 100 percent Sub Prime and Alt-A loan programs materialized out of thin air, next thing you know, Realtor Estate Agents are pushing houses like crazy, values are rising, Mortgage Companies are closing loans right and left and of course, Lenders and Investors are becoming wealthy.
Whose to blame ? well of course, the Mortgage Broker who had the least amount of influence over this situation. Whose gets to pay for it ? that’s right, the tax payer. Who profited the most, Big Bankers and Investors who’ll stay in business, and pay nothing for their involvement.
Now, let’s put the ball into action while the government and regulators aim to put the Mortgage Broker out of business, and put together a huge bail out program that will cost tax payers literally BILLIONS.
If you follow the trail, you’ll understand why the government now has to bail out big bankers; simply put, The Bush Administration wanted to be here’s, so it encouraged Big Bankers to make it happen. Maybe we should be asking our elected officials some questions.
What do you think ?
As a former retail loan officer at Countrywide with 15+years of mortgage banking expierience, I submit that the “Fast and Easy” loan accounted for upwards of 50% of countrywide’s loans for the past 8 years.I will go so far as to say that fast and easy catupulted country wide to the # 1 lender in the land. Beyond that the original comittment inked with FNMA in 1998 started out as a “test” became an exclusive countrywide/FNMA product and allowed countrywide Retail LO’s to do 95% SISA with no verrification of employment tenure.This led to the opening of the flod gates to the credit crunch as we know it.
Please note that I do believe Tom was correct in posting. UNLESS you are a corporation you need to file a 1099 for any income exceeding $600.00 (99% of all brokers, I do believe???). I guess the independent brokers don’t care now that many are out of the mortgage biz and still driving around in their $100K autos! Just an FYI: found this explanation on Wikepedia. “Form 1099 is a form promulgated by the Internal Revenue Service (IRS) and is used in the United States income tax system to prepare and file an information return to report various types of income other than wages, salaries, and tips (for which Social Security Administration Form W-2 is used instead). The term information return is used in contrast to the term tax return although the latter term is sometimes used colloquially to describe both kinds of returns.
Each payer must complete a 1099 for each covered transaction. Three copies are made: one for the payer, one for the payee, and one for the IRS.
IRS instructions for form 1099, including a guide to what payments must be reported.
A notable use of Form 1099 is to report amounts paid to independent contractors (in IRS terminology, such payments are nonemployee compensation). The ubiquity of the form has also led to use of the phrase “1099″ to refer to contractors themselves. U.S. tax law requires businesses to submit a Form 1099 for every contractor paid more than $600 for services during a year. This requirement usually does not apply to corporations receiving payments.”
I worked for CW and know the compensation was higher on subprime, 125% LTV and fast & easy. They probably changed that since I left to cover their tails, but believe me we got paid a lot more on those “specialty products,” but I can still sleep at night because I only tried to get one specialty loan closed and due to substantial changes in UW guidelines midway resulting from the forced changes, it was rejected and did not close. Needless to say, I did not make much $$$ while working their, glad I was released from that mortgage prison!
Adam,
You are all over the underlying problem which led the our industry down the path of “Greed”. The Fast and Easy formula was like retail stores selling “Heroin” to anyone who was savvy enough to know the code name.Pretty soon, everyone found the most powerful loan known to man was available without the huge mark up normally associated with SISA loans.Then wall street got into the game and started securtizing the stuff and we are now witnessing a nation of homebuyers in rehab.
By adding a 3 year prepayment penalty to the Option Arm loans I was brokering to Countrywide, Countrywide would pay me as a broker 3.5% of the loan amount. Without a prepayment penalty, they would pay almost nothing, .375%
The claim that they did not reward prepayment penalties is A HUDGE LIE BY COUNTRYWIDE–I HAVE THE RATE SHEETS FROM 2005 TO PROVE IT!
The real problem was not the money paid to brokers who were pushing these Alt A or subprime vehicles, most brokers I knew at best only got 2 points on the back. The problem was the product in and of itself. A SISA is essentially a FICO only product. Prove some reserves and have a 680 or better score and you could get a 95% LTV loan. You did not have to prove income, you did not have to prove assets all you needed was an acceptable FICO score. As to the rewards for prepay, indirectly all lenders in Alt A and subprime rewarded the broker / customer for selecting a prepay. If you selected the 2 or 3 yr prepay your rate was .5 to 1.0 pts lower than it would be without one. The problem on the Option ARM’s was that borrowers were being sold on the initial payment and the brokers were qualifying them on the actual rate – say 7.5%. The broker would get the 3% yield. The law however did not obligate the broker to inform the customer at which rate he was being qualified. Most brokers I spoke to would only inform the customer of the interest only payment as the qualifier and then inform them of the minimum payment option.
Wall Street is to blame for this. Bear Stearns and Merrill Lynch along with the hedge funds and ratings agencies that acted as enablers. They loved this stuff and for a while could not get enough of it. As far back as 2005 many in the industry were concerned about the ease of stated loans, but the “investors” assured many of us that these loans were performing better than expected and they preceded to loosen up the guidelines as the rates went up. What were the brokers to do? Not sell? I spoke to many brokers in Florida who would tell me that customers – borrowers would come to them demanding the Option ARM or a Hybrid Option ARM because they liked the flexibility. I myself went to a few closings where Option ARM’s were sold and the closing agent would annonce on at least 4 occassions during the loan that if the customer were only to pay the minimum, he/ she could end up owing more than they borrowed and, they were required by law to let the borrower know what the fully indexed payment would be.
You know I’m tired of hearing about us poor mortgage brokers, we have been regulated the hell out of business, but no one ever talks about about the real estate agents who routinely get 10 per cent commissions. If they were mortgage brokers that would mean they get paid 10 points. with ten points who needs yield spreads? as a former New York Mortgage Broker, we averaged 3.2 points or 3.2 per cent on every deal front and back, which was about the max allowed by law but still the real estate brokers get ten per cent or should I say ten points….were all in the same business….lets call apples ….apples…the only difference is they have a stronger lobby and we did all the work,
Up until recently, a 4506 was not required by Countryfried retail.Nothing was required except borrowers proof of identy and a signed 1003.Every borrower with a 680 score got 95% financing with 1 day on the job and any “reasonable income” was accepted no questions asked.
As a Retail LO I took the app on Fri and we drew docs on monday and closed on Tuesday..Fast and Easy Pleasy..and oh by th way FNMA’s famous line of “risk based pricing” became the biggest lie of all because I closed that loan at FNMA full doc pricing with no add ons for No Income Verrification…No Asset Verrification..and a telephone verrification that the borrower worked where he said he did.As long as Countrywide’s Clues UW system said OK the UW rubber stamps the deal,,wham bam thank you mam,easy pleasy fast and easy..with no add ons to full doc pricing..
I have worked for several wholesale lenders. They ALL give brokers the rate hit overages for prepayment penalties. I mean, technically the overage could be given to the borrower & end up reducing discount points or becoming a pricing credit. But come on, it is the broker’s choice to do this & broker’s are in the business to make money. I have seen pricing additions for PPP range from .25 to 1.5%, never as high as mentioned above, but I never worked for Countrywide & I don’t I doubt it. Lender’s thought they were ‘protecting’ themselves with that crap. A foreclosed home is a foreclosed home, whether or not there was a PPP on it.
worked at Countrywide and i can tell you for a fact that once a Fast & Easy was submitted the income could not be changed. i don’t know what went on in the broker world where guys like you who can’t do the simple math required to do a stated income loan reside, but it didn’t go on at CW retail. also i’m still trying to figure out how it would have been to the borrower’s advantage to give them a loan product with a HIGHER rate????????????? sounds like someone who can’t compete trying to tear down a better company.
That’s about how it goes
Allen is right. That is the incentive for the L.O. to give the client the PPP. CW will make up that m$ney in a matter of months. When the client comes to their senses and tries to opt out of this loan, well, CW will get a little bit more booty on the way out.
But you are right, its not about the PPP. A bad loan is a bad loan. The PPP just makes it worst when the loan goes bad. It’s the broker’s choice to do this & some broker’s went too far.
You know after reading all of these postings, I really started to get irritated that not a single one stated anything about the borrower having any type of responsibility. Whatever happened to “LET THE BUYER BEWARE”. I worked for Countrywide for 15 years when they were small all the way to being number one. I can remember constantly being questioned by mortgage brokers, “why don’t you have this product”, “My borrowers don’t have that much down payment”, “They can’t afford to qualify with those ratios”. You know what then? Countrywide came up with HOUSE AMERICA product. Why? Because the CONSUMER wanted to be able to buy a house. Everyone is blaming the brokers, bankers, lenders, investors, and not a single sole is looking at the source of the beginning. THE CONSUMER. Business 15 years ago was booming, not like that of the past 8 years but still going very strong. It wasn’t until the borrowers started complaining because they couldn’t qualify with 28/36 full documentation ratios or put a minimum of 10% down on a fully amortized loan payment plan that the stated deals and higher LTV programs came out.
I’m not saying that some of the responsibility rests on brokers, lenders and investors. I dealt and still deal with plenty of dim wit let’s hit a home run on every borrower brokers, but there are tons and tons of very reputable brokers out there too. I do think we need to take a step back and seriously contemplate who all is involved before finger pointing takes place. One last comment: When a company (in any industry) spends money researching and developing a new product, what drives that product development? Answer: Demand. Who is demanding that new and better product? Answer: Consumers!!!!
The senator needs to include consumers in his barrage of questions. Like here’s one: How many pages of disclosures did you have to sign in the course of your loan? Why didn’t you take the time to read over your legal loan documents before you closed or even during the 3 days you have to resend? Why didn’t you choose a 30 years fixed when it was at an all time record low price? I would love to hear the answers to these questions.
What’s interesting about that is the real estate agent will be quick to criticize any money a broker makes wheter its 1% or 3%. They would rather die than reduce their commission if need be. The insane part of it is they don’t really do anything. A deal can actually close without an agent. I know of no law that limits agents’ commission. No matter what, sect 32 will stop a broker from going willy nilly. And Tommy, no one even thinks of questioning the title company who makes hidden fees from the title insurance policy and notary fee, abstracting, etc.
Chris
The other Chris,
The consumers are the ones who elect the senator to office. Do you really think he cares? NO. He has to satisfy his constituents by “getting someone.” He know no more about what’s has happening in the market than his advisor’s are telling him. Finding a real solution to the market’s problem and his agenda are probably not the same.
At CW they didn’t have to get the 4506 signed. For what? If the score was 800, they didn’t even need an appraisal. How about that one. And we wonder why home values are screwed up.
OOOOWWWEEE
Bubbles,
The business type entities you have listed, Inidviduals, Partnerships, LLC’s and Corporations, are required to send 1099″s to anyone they have paid more than $600 worth of compensation to. Having owned my remodeling business for 28 years, the companies we subcontract work to who are incorporated, do not recieve 1099’s from me, as it is not required by the tax law. Please go to the website you left a link to and re-read what is posted.
to
Dani,
I agree with you on that one. Adjustments were made all the way down to the underwriter to make each one of these loans fly.
At its height, clients came in our office talking about getting put into these types of loans. They were either told no by other brokers so many times and figured out by themselves what to tell the next broker or they were accompanied with someone who just go one of these loans. Anything to get that house.
The “American Dream” is turning into a nightmare for many homeonwers. Why? From my perspective, it is because of human greed.
The housing crisis, mortgage crisis, financial crisis we are currently faced with is very complex and involves many players. Who is to blame? Where do you start? I believe there is plenty of blame to go arround and the way everthing is so interconnected, it may be such there is no one that is fully removed from being involved at some level.
Some of the people who are connected to creation of the crisis did so unknowingly. These people would be individuals who have money tied into pension funds that invested in the CDO’s and other financial packages that were backed by mortgages.
The reason the pension investors bought into these funds were due to their high rate of return, and that they were told they had low risk.
From what I have read, there are teacher pensions and municipal/state pensions that are probably invested in these products that were created by Wall Street.
In time, more will come out to who the big investors are as the lawsuits begin to be filed against the companies that created Hedge Funds and other mortgage backed securities.
In what I have read so far on this site, I have yet to see any mention of the National Home Builders who are a major player in creating the situation we all find ourselves in.
In 1992, national builders accounted for only 6% of the homes built in America. In 2006, they accounted for 27% of all houses built across the country.
In 2006, the 3rd larget builder, Pulte, wrote 90% of the mortgages on the homes they built. Many other National builders were in the 80% range of being the mortgage originator.
National builders who established their own mortgage companies were being funded by Wall Street.
The housing industry just went through it’s longest housing boom in history from 2001-2006. The NAHB, National Association of Homebuilders, and it’s members were key to extending the housing boom and helped to create the housing bubble.
It was during the Clinton administration that the drive to make homes affordable and available to every American started the push to achieve a homeownership rate of 70%+.
As the homeownership rate continued to climb, it also shrunk the size of the market of Americans who were truly qualified to purchase a home by having the income and creditworhtiness.
So what did the builders and mortgage companies do? They lowered the standards and reached out to a market that had not existed before. Why did they take on this risk of building and selling to higher risk homeonwers? Because of the money. They didn’t want the profit machine to stop.
Have any of you read the articles on the investigations into some of the National Builders by the SEC and the FBI? They are just at the beginning of seeing how widespread the fraud and collusion that was involved within the housing industry.
This issue is so huge, it will take sometime to fully get our arms around it.
From what I have read and understand, the government will help the large financial insitutions first in this mortgae crisis because of the billions of dollars they are at risk.
The homeonwer with a $200,000 mortgage about to be foreclosed on is peanuts in the big picture.
In reviewing the list of contributors to Mr. Schumer, now it all makes sense.
This is really interesting.
Many of the arguments on this site read like an argument in a dysfunctional family.
The blame game is in full gear.
What does it serve?
How does it help?
How is it solving anything?
In any dilemma, each individual, no matter their role, has to look in the mirror and own their own responsibility — what they have personally done wrong.
As long as the parties, the players are looking to blame someone else, a solution will not present itself.
Why?
Because one can only effect change in themselves and in what they have control over.
If you’re a broker, an honest, well-intended one, you might have the ability to INFLUENCE a buyer with the wrong ideas to pick a loan that is better for them, to not lie about their income or over extend themselves.
You MIGHT.
But if a buyer is determined to take that risk, no matter what they’re advised to do, they will. They will do it with another LO or broker who is greedy and doesn’t care about integrity or fair dealing.
And you know what, that broker/LO has to look at himself in the mirror at the end of the day and is 100% fully responsible for their part in the fraud. Not the consumers, not the Title Officer, the bank or the invester but THEIR PART.
Why spend time pointing at the consumer, Mr. Broker?
The consumer is purchasing something, not doing a job.
If I go to a doctor for a gastric bypass and the doctor does not inform me of the health risks, realistic dangers and I sign consenting the operation and he performs the operation anyway and I die, no one in their right mind will blame the patient for going for the operation knowing that they were unhealthy and could die.
It is the doctor who is the professional.
The onus is on the doctor to do what is right, as it pertains to his medical career and his responsibility as a physician.
Not withstanding the fact that many people may want to get gastric bypass surgery.
The responsibility is on the doctor to say, I’m sorry Mr. Fatty, I WILL NOT perform this operation on you because if you die, it will be my ass on the line.
The brokers who sold these loans to unsuspecting consumers DID not do that.
The brokers who sold these loans to well aware, shady consumers DID NOT do that — and they should have.
I just filed a complaint against the brokers who closed my loan (who entered into a settlement with the NYS Banking Department in April by the way, for false advertisement.)
I found this and thought it was interesting. Don’t know if it appears on this site already somewhere.
Superintendent Neiman Addresses the New York Bankers Association Annual Meeting
October 26,2007
OVERVIEW OF THE SUBPRIME PROBLEM:
“Let’s step back for a moment and consider the origins of the problem more fully. The causes are diverse; that’s part of the reason it’s so challenging to resolve. The subprime situation touches all market participants.
* It’s the mortgage loan originators, who have an economic incentive to put customers into unaffordable loans.
* It’s the mortgage brokers, who don’t provide sufficient supervision to the MLO’s who work for them.
* It’s the mortgage bankers who know they’re going to securitize all the mortgages they fund, and who don’t underwrite as if they were going to hold the loans for 30 years.
* It’s the investment bankers, who securitize mortgage loans and believe that disclosure cures all.
* It’s the secondary market purchasers who are reaching for yield and ignore the risk of the assets they buy.
* It’s the rating agencies, who should have figured out that the underwriting standards had become more lax.
* It’s the investors worldwide who clambered for more higher-yielding securities.
* And regulators had their own issues, with uneven enforcement among the states, and with federal regulators thwarting state consumer protection efforts through preemption.”
I Agree! It’s not just the mortgage companies that are behind the “credit crunch”. But how about we let the consumer take a little credit. Come on people, do we really not know what we are signing? We blame fast food for making us fat and now we are blaming banks for the fact that we are broke? Give me a break. Take some accountability.
Mortgage brokers established in the more recent years (most of them) were an LLC structure and require a 1099 to be issued for compensation paid over $600. In California individuals are licensed to do business if they have a real estate license. They would require a 1099. The real problem is the companies like Allied Mortgage, Benchmark or other net branch mortgage companies that allow a loan officer to use their licenses for a flat flee (about $500 per loan). These mortgage loan officers often have little or no experience and have contributed to the problem more than anyone could imagine. This form of license lending is prohibited by almost every state in the country. When problems do occur with these companies originations, lenders like Countrywide often do not push back because they originate so much product for them. In fact Countrywide gives them “preferred lender status” and often pays them bonuses for production. Simple solution: only allow mortgage brokers to be paid by origination points and no yield spread. Most mortgage fraud comes from mortgage brokers. They often are gone once the problem is uncovered and the lender is stuck. All lenders have the same minimum net worth requirements and need warehouse lines to conduct mortgage originations. Last point is to require national licensing of ALL mortgage loan officers. Furthermore, do not allow any convicted felons to be licensed or on the premises as a consultant. This house needs to be cleaned from the inside out.
Is there any potential that the Governor will try to get other companies (such as Option One Mortgage Corporation in Irvine) to work with their borrowers? We have tried and tried to reach them to fix our rate, but to no avail. Now that we’ve stopped paying (since our rate went up this month) they call 2-4 times/day. But it’s always offshore personnel (who seem to be in India) and they can never give us to a Home Retention Specialist. We’ve just about given up.
I might be your first test case. I am currently going through a loan modification process with Countrywide. I have made it through all of the steps and am currently waiting for final approval. I fulfill all the requirements you listed. I expect to hear back from them in the next few days. I will keep everyone posted on what happens next. Thanks.
I am also on the final stages with countrywide but not in CA im in PA. It is submitted to the investors now and i should here back by the first week in Dec. Steve how long have you been going through the loan modification process with countrywide?
JP, sorry but you are mistaken.
Fast and Easy, was a SIVA program. Stated Income, verified assets. This was for a max cltv of around 80%. For those of you that don’t understand CLTV, it’s combined loan to value.
Moe,
1. The typical FHA loan isn’t that much more work than another loan, granted you have the support staff. One thing to keep in mind is that FHA appraisal’s are very “particular”. Led paint, loose handrailings and whatnot. Also, keep in mind if an appraisal was completed on a property, and something was not properly installed on the home. The appraiser would come back out, and throw an additional charge. So your looking at an FHA appraisal “very picky” vs. a standard appraisal. You forgot to mention the PMI for an FHA mortgage. Why mess with that when you can take someone Subprime, and not have to have that borrower “pee in a fan”. The monies goes towards P&I reduction. (granted on a conventional mortgage your paying mostly Interest for the first 7 years or so.)
2. With an FHA loan there is no additional cost versus a prime or subprime. Appraisal is usually POC (paid outside closing). So I don’t buy this at all.
3. At CW you cannot “call your buddy”. The appraisal was given to Landsafe, and you never knew who you were going to get to do the appraiser. This is fact would actually keep the loan “honest” so to speak. Not like a mortgage broker that would make the call and say,”Fred, I need $217,000 for this property or I might have to go elsewhere.” Also, title companies are chosen by branch management. You never knew if you were going to get an overweight man with “man boobs” or a great looking female to close the loan. Also, the file was handed to the processor right when you “locked/uplifted” the file. So, this my friend again, is false information.
4. $12,000 commission check? CW compensates on BPS, volume, first vs. seconds, prime vs. subprime and call-in (dispatch) vs. outbound (port or non-portfolio lead).
I really wish you would actually know about the inner workings of something before getting all excited and contracting “diarrhea” of the mouth.
“Everyone is a genius at least once a year. The real geniuses simply have their bright ideads closer together.”
Georg C. Lichtenberg
I know more than I think you think I know and your starting to personally attack me Boo Hoo and that’s crossing the line.
Don’t tell me going stated/stated on a borrower with a 600 score and taking them subprime has the same degree of difficulty as going FHA. That there just shows your blatant ignorance.
I wasn’t speaking of working at CW, it was more of a “brokered” loan comment. You know a loan originated by a broker and submitted to Countrywide as a “brokered” loan, yeah those kind.
Yes, $12k checks, again broker comment not CW. I saw much larger checks than that.
So, before you spend your time on a Sunday trying to make me look like I don’t know what I am talking about and actually make it look like you wasted your time by spewing your little crap rant at me.
And a
I posted your question on this forum. I think this is a good question to ask, Who have they helped. So far we have not found anyone. That I know of. >
I don’t think that Freezing the rate would help, They need to fixed and lower the interest rate for the term of the loan. I wouldn’t bet on them if they didn’t. Don’t buy mortgage stock.
QUOTE >>> Larry Litton Jr., chief executive of Houston’s Litton Loan Servicing, said his company plans to expand the initial interest-rate period for up to five years.< <
As you said Moe, The Proof is in the Pudding.
You are right, Check out that web site it has a lot of info regarding law suits against Fairbanks and others.
The Government
Has on a SUBPRIME BLINDFOLD! We have no Protection from this.
http://online.wsj.com/article/SB119603917642103489.html?mod=googlenews_wsj
Citigroup Feels Heat To Modify Mortgages
I have HomeQ. I am currently waiting for the “supervisor review” to be finished on my proposed loan modification. I almost meet all of the requirements, other than being on time. They hit me hard with escrows that caused me to fall behind before my rate reset. Now that they have gotten my situation resolved with the escrows, I am waiting to hear if they are going to approve my modification. I currently owe them 3 months of payments. I proposed them 1/2 up front, lower interest and fixed. We’ll see what happens. It has been almost 3 weeks since I applied.
Fast and Easy is a STATED INCOME, NO ASSET VERIFICATION LOAN and a 90%LTV – I still work there unfortunuately – it is also referred to as Fast and Sleazy – no hit to pricing and a 680 gets you in – if you are going to discuss it you should know the facts – commission is based on RATE simple as that.
Fast and Easy is a STATED INCOME, NO ASSET VERIFICATION LOAN and a 90%Ltv – I still work there unfortunately – it is also referred to as Fast and Sleazy – no hit to pricing and a 680 gets you in – if you are going to discuss it you should know the facts – commission is based on RATE simple as that. All of this applies to every lender out there – not just Countrywide. I am not defending CW nor any other lender but I do believe in risk based rates for the lender – I do not believe in the broker or the loan originator making 3 points on a deal for filling out a loan application – this is what broke the system for the borrower – Wall Street broke it for the industry with buying the ridiculous loans being originated and now they cry foul.
HERE IS THE CHL COMPENSATION THAT WAS JUST PUT IN PLACE EFFECTIVE 12/01/2007
THE MEANS THAT A LOAN ORIGIONATOR COULD GET A HEFTY WAGE INCREASE BY GOING TO WORK AT WALMART. I QUIT THE DAY THIS WAS ANNOUNCED. B
Units Funded
Units Payout (Bps) BPS = 12 BPS = .012%
0 – 2 0
3 12
4 14
5 16
6 18
7 20
8 22
9 24
10 27
11 29
≥12 31
Lead Type and Product Specific Incentive -
The incentive basis points in the following tables will apply only to funded loans from the specified lead source and/or of the indicated product. These incentives are in addition to any Units Funded and FICO Score incentive for which the loan may be eligible for. For a loan to be considered self sourced it must meet the eligibility criteria indicated in the incentive plan. Also note that the additional lead type payout for Internet Outbound loans will apply only through February of 2008.
Lead Type Incentive
Lead Type Payout (Bps)
Self Sourced 15
Internet Outbound * 5
Portfolio Outbound ** 5
* non-port customers only; effective only through Feb. 28, 2008
**applies to NSC Port Dedicated AEs only
Product Type Incentive
Product Type Payout (Bps)
A-HELOC 40
Units Payout (Bps) BPS = 12 BPS = .012%
Loans BPS Paid $200,000 x .12 bps = $240
0 – 2 0
3 12
4 14
5 16
6 18
7 20
8 22
9 24
10 27
11 29
≥12 31
THE TOP PRODUCERS THAT HAVE WORKED AT CHL FOR YEARS DO BETWEEN 6 AND 8 LOANS A MONTH ON A GOOD MONTH, SO THEY JUST TOOK A 75% CUT IN PAY.
NEXT TIME YOU TALK TO A CHL LOAN ORIGIONATOR, GO EASY AS THE ORDER TAKER AT MCDONALDS IS MAKING AS MUCH OR MORE MONEY.
I applied for a Loan Modification with my lender EMC. They had turned me down when I tried to re-finance the adjusted rate down, even though I was not asking for cash out. They said that my income was to low. I have never been late, even with the adjusted payment up $500 a month, but only because I work overtime and put every penny I make towards my mortgage, utilities,gas and food, nothing else. I have not heard good things about EMC so we shall see what happens.
Has anyone had any experience with a loan modification with Saxon Mortgage? Our ARM is due to reset in January. They told us we could not do anything until December 1st when they determine what the new rate will be. Since Saxon is subprime I am horrified at what that new rate will be. Anyone out there have any experience with them?I have been reading horror stories about Saxon and am scared to death that we have not a prayer of a chance of modification. Please help with any info or guidance. Thank you…
I too am with Homeq and my situation sounds the exact same as Heather. It has been 3 weeks since I requested a loan modification. I am still waiting to hear. At one point, I think my paperwork got lost in the shuffle, but now I seem to have a capable and optomistic person working on my file. She was very apologetic as to why I haven’t heard anything yet. Heather: have you heard yet?
Hi there great site. Keep up the good work. Hope you are having a good Monday. Any thoughts on my site, http://www.gregorygarver.com
For those that have gotten some help with Home Eq could you provide some contact information as I have had no success in trying to reach someone. I have sent two certified letters to the lost mitigation dept as well as called and no one seems to want to help. At this point our account is still current, however we are trying to be proactive before our loan adjust because we know we will not be able to afford it. Any names, phone numbers, email address or mailing address would be great. Thanks
I am with CountryWide and have due to adjusted rate and illness gotten behind on my second morgage for three months at just $500.00 total with late fees. CountryWide holds my first and second morgage and since I’m behind only on the second they are wanting to forclose.
I was contacted by someone CountryWide contracted to help with those who are behind on their morgages “before I received the letter they were nocking on my door”. This person is a REALATOR.
I have started the loan modifacation process today. BUT I am not happy with how this is being handled. I have been in my house for 3 years and have only recently had problems meeting my payments. In the last two years my rate has adjusted 4 times. Thanks
My loan is through GMAC and as instructed by the toll free Hope Now number I am to contact my mortgage company. When I called GMAC to inquire about my options and mentioned the Hope Now Alliance…I was told they are still waiting on information from the Government. Sounds as if I am getting the runaround. Has anyone else dealt with GMAC and had any luck applying for the rate freeze? My rate is due to reset Jan 1, 2008 and with the ever increasing cost of everything these days I am afraid I may not be able to afford the new monthly payments. My current mortgage has been paid on time for the past 2 years without ever being late.
Great post and great blog.
I also have Homeq and I’m current with my payment.In April it resets.I’ve been trying to contact them since October,by email and phone calls.They have never called or emailed me.The one person I spoke to said they wont talk to me until i am late with payments.FINE. I’m buying another house and they can stick this one.Then I bet someone will call me and try to work something out. It’ll be too late.Our bad for getting these loans.It was coworkers of mine that did it.I had no Idea that money was that important to them to screw over other coworkers.Now the banks are greedy.It would be so easy for them to not be hard nosed and refi everyone.
Hi – just wanted to say good design and blog .
this total greed on behalf of the men at the top of the food chain. They were all taking a piece of the pie and letting the homeowners of america suffer. As well as the blinded loan officer that didn’t know how the mortgage industry works. Or the banking industry. But ervery body blames the local broker for selling what these big banking instituions present to them. If they really cared about americans they what have stop the greediness with them. But they did’nt did they. On average if a loan was not making at least 8points with countrywide then they would decline it. Managers would not cut into thier commission for homeowner. But sometime loan offciers would. I left Countrywide becuase I could sell the same loan for thousands less. And make a decent cut. Price gouging came from the bankers not brokers. Who do you think paid for all the millions of advertiseing on teaser rates. Just to get the people through the door to steal thier Equity. Even the o point loans the homeowners were still paying with a higher rate unaware becuase banks do not have to disclose YSP. Itmakes me sick when a client wants a opt loan. When banks offer it and they believe it. But the truth of the matter is they pay for it in the long run. They are better off paying points to a broker who values thier buisness and is up front and honest. As the broker needs repeat buisness and refferals to stay in buisness. If a company advertises something for free. ask your self how do they stay in buisness? As we see we are in this crisis becuase greed all the way around. Everybody is to blame even homewoners. And the real estte investors who didn’t want to pay points. Even when they were making $100,000 on a deal they would not want to pay any points.. Waht a joke.
Saxon is more helpful than some of the others.
HomeEq Mortgage Servicing – I called and explain my situation I cannot afford the home anymore – the person that helped me said that she was going to file a modification request. (I have never been late with a payment) She explained that they were helping a lot of people by modifying their loan. She said that they were going to review my request and that I should call back. I called back – whoever I got said they denied my request because I did not qualify. I asked why? He said he did not know. I asked to talk to a manager – I was transfer “Tricia” said they were reviewing my request to call back again. I called back for the 3rd time and they told me that HOMEEQ is not a bank — they have never modified a loan/contract. That whoever I talked to gave me the wrong information. She asked me to forget about it. I do not know what to do.
Can anybody help !!
MY FIANCE HAS TWO MORTGAGES WITH HOMEQ AND SHE ALSO CALLED HOMEQ AND APPLIED FOR LOST MILIGATION AND THEY SENT HER THE PAPER WORK WHICH SHE FILLED OUT AND HAD SOMEONE HOLDING HER PAPERS AND SUMMITED AND WE FIND OUT THAT SHE DOESNT EVEN QULIFY FOR THIS, WHY IN THE FIRST PLACE DID THEY MAKE HER FILL ALL OF THIS OUT THE REP WAS SHAWN MCCCABE THESE PEOPLE DOENT KNOW WHAT THERE DOING MY MORTGAGE IS ABOUT TO RESET AGAIN FOR THE SECOND TIME IN APRIL I DONT KNOW WHATTO DO. I DID FIND OUT THAT THE BANK THAT HOLDS THE ACCOUNT FROM HOMEQ IS BARCLAYS BANK ITS A INTERNATIONAL INVESTOR..
The lenders know that Streamlining the loan will help alot of us who really can’t afford the adjusted rate. It is designed that way I guess. I am with Countrywide as well as Accreidted through Wells Fargo.
My question is….Are Streamline Loans based on your credit or payment history?
Email the response..
Badu69@aol.com
option one mortgage in fl. i too have been dealing with them for months if anyone has been gettin transfered to india just ask to be transfered to the us i have gotten a verbal approval for a stream line modification to freeze my rate for 5 years but they will not give me anything in writing until i am current with my mortgage i hope this isnt a scam just to get my money then they say sorry we made a mistake we cant freeze your rate this is happening today 3/20/08 i will keep everyone posted
LITTON. I am two months into the Loan Modification process with Litton Loan Servicing. It started out well, they said I qualified. A representative I spoke with Roland Trevino said he was trying to get my Loan down to 7% from the current 10.5% locked for at least the next three years. He said I would only have to pay $500 paper work fee if his investor accepted the offer. I was asked to call back after a few weeks. Now everytime I call them, I am asked to enter my loan number and immediatly transfered to a voicemail. I have not heard back from Litton in writing and have not had calls returned at all. Apparently there is a time frame by which a home owner must accept the adjustement. But since no human is available ever, there is no way of knowing if I was ever even approved. I too like most others here, have stretched my budget to make high payments in hope that some type of program actually works for the homeowners.
LITTON continued. Something with Litton and the so called ‘Rate Modification’ is definately not right here. I am current with my mortgage payments, but Litton’s shady behavior tells me something else is up with that company. I don’t think they intend to use whatever the Government made available to them to aid homeowners at all. I’ve yet to meet one person, who has been refinanced or had a loan interest rate modification doen to their loan. Today the US Government tried to pass a proposal to aid the housinf crisis…it entails..AID for buyers of Forclosure Properties and Home Builders. I smell a rat.
Call Litton again today, they said now it takes 90 Days to process the Rate Modification.
people wake up and stop being pussies!!! we need to rally together and burn these f@@king companies down one by one!!!-over throw the govnmt, american people we need our country back!!!
Steve, i hope you are getting help with your loan modification.
I originally purchased my home pre-construction in 2005.
purchase price $430,000. The home was not completed until beginning of 2007. Appraisal came in, in May 2007 for $500k I was told. I was thinking this is great, I will be moving into a home with Equity. But as rules apply when you do a loan itis based on the lower of the sales price or appraisal.
ok, we did an 80% first mortgage ((344,000) and a 15% 2nd mortgage (64,500.00) . my husband middle credit score was a 728 and mine was a 732. we had about 8 to 9 months of reserves in the bank. Countrywide Loan Officer said they would try to get me the best deal for me and my family.
Guess what I find out today that I was f***ked by Countrywide.
my first loan they gave me a 7.25% and on the sencond a 15 year Heloc (baloon) Interest Only payment at 10.5%. I did not know anybetter and at the time was happy to buy my new home.
I was let go in the middle of last year and was unemployed for over 8 months, i had to use all of my reserves. I tried contacting CountryWide several times throughout those months and they were not able or not willing to help. I recently got a job and am working full time, making a decent salary, but unable to meet the month to month expenses. I have never paid my mortage late, I contacted CW on 5/1 and on 5/5 to ask for help on a permanent loan modification where they could combine both my loans into a low fixed rate and drop my PITI payment so that I can continue to live in my home, continue to pay my debt to them and ultimately not have a foreclosure (which I think would be good for both CW and myself).
But as it has been stated on your website time and time again CW does not give a shit about its borrowers. I was very bluntly told that unless i did not pay the mortgage they could not do a loan modification. WHAT ? i explained my credit that i had worked to achieve and take care of for many years would be damaged. The CW rep stated too bad – that is the only way the CW will even help you. WHAT WHAT WHAT !!!!!
can’t CW and other lenders realize that we are in a ‘recession’ that everyone is feeling the pinch?
Why can’t they help those of us who have been good customers paying on time and are calling them before they go under in good faith to make a new payment arrangement?
so CW would rather see people f**k up their credit and then possibly help them or possibly take away their home and put them on the street.
Can you or anyone help our family?
thank you and hope for a positive response (but i won’t holdmy breath)
I have a sub-prime mortgage from Americas Servicing Company, owned by Wells Fargo. I requested a modification over 2 months ago. I have never missed or been late on a payment and I have lived in my home for 24 years. I was denied the modification because they said I could not offord a lower interest rate!! I turly believe they do not desire any modifications. They are quite happy collecting my higher payments. I’m not sure what the hidden agenda is, but I’m pretty sure someone is planning something.
I have another problem that I would like to call to everyone’s attention…I recently applied to CW for consolidation of a first and second. Being retired and with cost of living expenses increasing, I needed to lower my monthly payments by combining them into one loan at a lower overall interest rate. My FICO was in the high 700’s, an excellent credit history, and with an income high enough to qualify…BUT, CW decided I would have to have the property reappraised if I wanted the loan. So, I paid for it in advance, and they contacted a local appraiser. The appraiser performed his duties on the appointed date, and left.
Several weeks later, I was turned down by CW because the appraised value was not high enough to meet their “Loan to Value” requirements.
I was shocked! I requested they provide me with a copy of the appraisal and sure enough, my suspicions were confirmed! The appraiser made several glaring mistakes; he had left out of the value equation, such things as a car port, a 3 year old re-model that added an additional 25% more space to my home. I informed CW about this, and their reply was “they could not talk with the appraiser, but would send an email to him that he had omitted the car-port. Although he made a $10,000 adjustment, without explanation, he did not address the other issues I had raised, i.e., wood floors in the kitchen, covered decks, extensive landscaping, parking for 7 cars and a boat, or 4 cars and an RV (he only stated 2 cars), and various other smaller items..
The issue is; do I sue the appraiser for devaluing my property? Or do I sue CW for not going to bat for me when they had been offered with valid proof of the items he, the appraiser, had ignored. Certainly, I don’t want the same appraiser…anyone who can walk through a carport, and then claim there isn’t one, isn’t much of an appraiser, and…any lender who accepts a bogus report, isn’t much of a lender!
I have a mortgage with HomeEq that is set to adjust in October. I called to find out about the loan modification program they describe on their website, but they told me to call back in August. Great…so I wait until two months before it adjusts, and if I’m not qualified…..then what??? The problem with these mortgages is that when we took them, we were told we could refinance to a better rate after the initial term was up. Now the mortgage industry is down the tubes and there is nowhere to refinance to! There are no loans to be had! I have tried refi’ing three times now, only to find out that because more than 1/2 of the units in my building are not owner occupied, I cannot qualify for any FHA loans, and my score is only 605, so with the market like it is, I can’t get a regular loan.
Finally my loan modification was approved and I recieved my paperwork today! Heres how countrywide plans to help me! They are going to raise my morgage payments around $40 a month and charge me an additional $4000 in interest! It seems that lenders see the new home modifacation laws as an opportunity to make even more money! I dont understand how our goverment will allow this but then thinking back about the misuse of billions of dollars in bailout money that was given to these big companys with little or no consequinces and suddenly it makes perfect since… prepare for the end of life as we once lived, prepare for the end! The answer to our recession isnt raising prices! The end is near!
It’s not that easy to figure out what to do with this whole loan modification issue.
The new Federal Loan Modification program has been created to helping people navigate the complicated system and offer guidelines.
However, this plan will only help approximately 15%-20% of customers. It addresses the needs of owner occupied, conforming borrowers with loans under $417,700 and with a current ability to pay a portion of their mortgage with loan owned by lenders participating in the program.
Litton Loan denied a loan mod request ,but the agreed to raise my monthly payment from 1750 to 2500 for 2 years and still at 8%. They have posted a sale date of 07/29/09 and my family is losing our home. Litton is no way “working with anyone”
They are predatory, despicable people.