This is huge news and it looks like Countrywide borrowers will now be dealing with Bank of America. I will get all the details I can on how this will affect Countrywide borrowers that are in the loan workout and loan modification process.
You need to know ASAP how this will affect you and what B of A plans to do in the loss mitigation arena. Could be good? Could be bad?
Please let me know your thoughts or experience in the forum at www.LoanSafe.org.
Creates Largest U.S. Mortgage Lender and Servicer CHARLOTTE, N.C., Jan. 11 /PRNewswire/ — Bank of America Corporation today announced a definitive agreement to purchase Countrywide Financial Corp. in an all-stock transaction worth approximately $4 billion. (Logo: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b) The purchase will make Bank of America the nation’s largest mortgage lender and loan servicer. This is an important advancement in the company’s desire to help customers and clients meet all of their financial needs. A mortgage is one of the key foundations of many customer relationships. Countrywide will benefit from the stability of being part of the largest and one of the most financially strong financial institutions in the United States. Bank of America will benefit from Countrywide’s broader mortgage capabilities, including its extensive retail, wholesale and correspondent distribution networks.
The Calabasas, California-based company operates more than 1,000 field offices and has a sales force of nearly 15,000.Countrywide also has a leading mortgage technology platform, a well in home lending and management expertise in a number of key areas. Bank of America would gain greater scale in originating and in the U.S. Countrywide had $408 billion in mortgage originations in 2007 and has a servicing portfolio of about $1.5 trillion with 9 million loans.
The purchase also includes Countrywide’s Lender Placed insurance and other businesses. “Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation’s premier lender to consumers,” Bank of America Chairman and Chief Executive Officer Kenneth D.Lewis said. “Countrywide customers will gain access to a broad set of consumer products including credit cards and deposit services.
Homeownership is a fundamental pillar of the U.S. economy and over time it will be a key area of growth for Bank of America.” “We are aware of the issues within the housing and mortgage industries,” Lewis continued. “The transaction reflects those challenges.Mortgages will continue to be an important relationship product, and we now will have an opportunity to better serve our customers and to enhance future profitability.” Countrywide’s deep retail distribution will enhance Bank of America’s network of more than 6,100 banking centers throughout the U.S.
Read the rest of the story here
{ 52 comments… read them below or add one }
My take is this is going to be bad for troubled borrowers. Confusion at both CFC and BoA. Front liners at CFC expecting their pink slips at any moment so not caring to do their job.
If Lewis sees this as an opportunity to increase loan mitigation staff instead of a chance to increase productivity (ie fire people) then it could work out well.
Yeah and Mozilo getting the 115 million payout, plus company jet, plus paying is golf club membership. That 115 million should go towards some home retention program.
YEs, Mozillo bailed out when it got too hot in the kitchen, now it looks like the buyers and the investors are left in the fire.
Great.
I bank with Bank of America, and all I know is when dealing w/ customer service, you better have translator on the line with you.
Hey, I just had another thought: Countrywide sells to Bank of America before it’s really clear how much they are worth — that is before the true state of their books becomes evident, after the ARMs start to adjust and people really start being unable to pay.
ARe they really worth $4 Billion?
JacMac-
Are you warm and a little fuzzy. I know this should make you feel a little better.
JacMac-
The servicing dept of CW is lucrative. Is the bank included in the sale? what is included in the sale. BOA will make money off this. It’s a question of how much and when.
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The Deal by Allan Sloan Full coverage
January 11 2008: 3:41 PM ESTEmail | Print Type Size
BofA’s awesome Countrywide tax break
Brace yourselves, taxpayers of America. You’re going to help Bank of America finance its $4 billion buyout of Countrywide.
By Allan Sloan, senior editor at large
Video
More video
Bank of America purchases Countrywide Financial, one of the companies hardest hit by the subprime mortgage meltdown.
Play video
THE COUNTRYWIDE BUYOUT
Get the whole story at CNNMoney.com
Why the deal makes sense
The skeptics’ view
BofA’s awesome tax break
Will BofA catch Countrywide flu?
Borrowers: Fear not
$4 billion rescue
BofA eyed for downgrade
More from Fortune
The U.S. can afford Iraq
Audi and Ford drive two different roads
Beat the mid-career blues
FORTUNE 500
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NEW YORK (Fortune) — Guess who’s helping Bank of America pay for its $4.1 billion purchase of Countrywide Financial? Answer: The taxpayers of the United States.
That’s because Bank of America (BAC, Fortune 500), which is solidly profitable, will be able to use some of Countrywide’s losses to offset its own taxable income. The tax break could total about half a billion dollars over the first five years, according to an estimate by tax guru Robert Willens, who left Lehman Brothers Friday after a 20-year run and will be in business as Robert Willens LLC starting next week. The losses could be worth considerably more to Bank of America starting in the sixth year, depending on how big Countrywide’s losses are when Bank of America formally acquires it.
At this point, of course, no one knows how much in losses Countrywide has run up since the junk mortgage market began souring and defaults accelerated. Countrywide (CFC, Fortune 500) itself probably doesn’t know. But it seems almost certain to ultimately be in the billions.
In tax circles, Bank of America is famous for its 1988 purchase of the failed FirstRepublic Bank of Dallas, which was being auctioned off by federal regulators. Bank of America, then known as NCNB Corp., the parent of North Carolina National Bank, discovered a way to structure the deal to save $1 billion of taxes, using a convoluted strategy that none of the other bidders knew about. That allowed NCNB to outbid its rivals for the bank, and still come out way ahead.
The Countrywide tax break isn’t in that league, but it would still be worth a lot of money. Willens estimates that Bank of America will be able to deduct $270 million of Countrywide’s losses annually for the first five years it owns the firm.
That’s based on a $6 billion purchase price – $4 billion to Countrywide’s common stockholders, plus the $2 billion of preferred stock that Countrywide sold to Bank of America in August. Willens says that you multiply that $6 billion by 4.49 percent – the so-called “long-term tax-exempt rate” – to calculate how much of Countrywide’s losses Bank of America can deduct annually for five years after the purchase.
A $270 million annual deduction would save Bank of America something more than $100 million a year in federal and state income taxes. The long-term tax-exempt rate, which is based on Treasury rates and other things so complicated that they make my teeth hurt. The rate changes each year, Willens says, but not by much. When I asked how it’s calculated, Willens, a master of tax arcana, threw up his hands. (Metaphorically, of course.) “It’s like the formula for Coca-Cola,” he said, “no one outside the circle knows it” and it’s so complicated that, “no one else wants to find out.”
So over the first five years, Bank of America can use a total of $1.35 billion of Countrywide’s losses to shelter its income. (That’s five years of $270 million annual losses.) If Countrywide’s embedded losses when Bank of America buys it exceed $1.35 billion, Willens says, the bank will be able to deduct the rest of the losses, without limit, starting in the sixth year.
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FORTUNE
The Deal by Allan Sloan Full coverage
January 11 2008: 3:41 PM ESTEmail | Print Type Size
BofA’s awesome Countrywide tax break
Brace yourselves, taxpayers of America. You’re going to help Bank of America finance its $4 billion buyout of Countrywide.
By Allan Sloan, senior editor at large
Video
More video
Bank of America purchases Countrywide Financial, one of the companies hardest hit by the subprime mortgage meltdown.
Play video
THE COUNTRYWIDE BUYOUT
Get the whole story at CNNMoney.com
Why the deal makes sense
The skeptics’ view
BofA’s awesome tax break
Will BofA catch Countrywide flu?
Borrowers: Fear not
$4 billion rescue
BofA eyed for downgrade
More from Fortune
The U.S. can afford Iraq
Audi and Ford drive two different roads
Beat the mid-career blues
FORTUNE 500
Current Issue
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NEW YORK (Fortune) — Guess who’s helping Bank of America pay for its $4.1 billion purchase of Countrywide Financial? Answer: The taxpayers of the United States.
That’s because Bank of America (BAC, Fortune 500), which is solidly profitable, will be able to use some of Countrywide’s losses to offset its own taxable income. The tax break could total about half a billion dollars over the first five years, according to an estimate by tax guru Robert Willens, who left Lehman Brothers Friday after a 20-year run and will be in business as Robert Willens LLC starting next week. The losses could be worth considerably more to Bank of America starting in the sixth year, depending on how big Countrywide’s losses are when Bank of America formally acquires it.
At this point, of course, no one knows how much in losses Countrywide has run up since the junk mortgage market began souring and defaults accelerated. Countrywide (CFC, Fortune 500) itself probably doesn’t know. But it seems almost certain to ultimately be in the billions.
In tax circles, Bank of America is famous for its 1988 purchase of the failed FirstRepublic Bank of Dallas, which was being auctioned off by federal regulators. Bank of America, then known as NCNB Corp., the parent of North Carolina National Bank, discovered a way to structure the deal to save $1 billion of taxes, using a convoluted strategy that none of the other bidders knew about. That allowed NCNB to outbid its rivals for the bank, and still come out way ahead.
The Countrywide tax break isn’t in that league, but it would still be worth a lot of money. Willens estimates that Bank of America will be able to deduct $270 million of Countrywide’s losses annually for the first five years it owns the firm.
That’s based on a $6 billion purchase price – $4 billion to Countrywide’s common stockholders, plus the $2 billion of preferred stock that Countrywide sold to Bank of America in August. Willens says that you multiply that $6 billion by 4.49 percent – the so-called “long-term tax-exempt rate” – to calculate how much of Countrywide’s losses Bank of America can deduct annually for five years after the purchase.
A $270 million annual deduction would save Bank of America something more than $100 million a year in federal and state income taxes. The long-term tax-exempt rate, which is based on Treasury rates and other things so complicated that they make my teeth hurt. The rate changes each year, Willens says, but not by much. When I asked how it’s calculated, Willens, a master of tax arcana, threw up his hands. (Metaphorically, of course.) “It’s like the formula for Coca-Cola,” he said, “no one outside the circle knows it” and it’s so complicated that, “no one else wants to find out.”
So over the first five years, Bank of America can use a total of $1.35 billion of Countrywide’s losses to shelter its income. (That’s five years of $270 million annual losses.) If Countrywide’s embedded losses when Bank of America buys it exceed $1.35 billion, Willens says, the bank will be able to deduct the rest of the losses, without limit, starting in the sixth year.
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Bank of America-Countrywide: The skeptics’ view
Mozilo gets money for nothing
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Why the Countrywide deal makes sense
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This is the true cost to US taxpayers
http://money.cnn.com/2008/01/11/news/companies/sloan_countrywide.fortune/index.htm?postversion=2008011115
Chris I’ve been called warm lots of times, but never fuzzy
Paul, that’s very interesting. I knew someone would be footing the bill.
“If Countrywide’s embedded losses when Bank of America buys it exceed $1.35 billion, Willens says, the bank will be able to deduct the rest of the losses, without limit, starting in the sixth year.”
Now that’s freakin’ amazing!
Time to sell your BOA stock
We in the industry have all wondered silently and aloud as to when this was going to occur.
The relevant news is that the absorption of Country Wide by Bank of America is not the end of this type of event. Next in line are WAMU, SunTrust and perhaps other large and influential Mortgage Banking houses into the folds of Bank of America, JP Morgan Chase, Wachovia, etc… Where does that leave the “consumer” i.e. you and me?
You know that S*&% Sandwich that someone referred to on one of the other posts? Well we the consumers are going to take a big bite everyday out of that deli delight. These institutions are large enough, globalized enough and well capitalized enough to refrain from that gourmet treat, in other words they can swallow up the bad stuff and not even burp. We on the other hand will gag daily on the repast that they are providing, paying the price for the folly that they initiated to create that unholy capital (toxic loans). If it does not cost you (the institution) in the short or long term, as you have the where with all to cover the losses, and the accounting exceptions to your bottom line granted by the government (for the self serving rescue), what and where is your impedus to fix the individual problems, of individuals, NONE.
On the flip side – do you really want just 4 or 5 institutions controlling the entire financial services industry – where is the Sherman Act and Clayton Act when we actually need them? Ponder the far reaching implications of this acquisition and all future acquisitions and just where we are going to be 15 years down the road. Truly scary if you have an overall understanding of the financial services industry and globalization.
We in the industry for over 15 or 20 years are deeply concerned and demonstratively worried and have been from the first hint in October of 2006 or so, that Bank of America may just acquire Country Wide. It has been in the works for a long time, do not kid yourselves that this was a “oh, I have 2 billion out and need to cover my potential losses/save face” kind of event. It was not, it was calculated and orchestrated, go figure and be very, very concerned.
Oh one more thing – “rare opportunity” my @ss. That is an entirely personal not professional observation. LOL
Fewer banks = less chioces/ less competition for the consumer….very bad idea!!!!!!!! With fewer banks they be able to charge fee’s at will, because consumer’s will have no other place to go!!!!! Very bad!!!!!
JacMac/Paul
Paul. Yes, this is going to cost us dearly. BOA is going to make hundreds of millions off this. They will get the 6billion back.
No taxes. We’ll pay those, thank you. Watch the layoffs and the pitiful excuses……..fire sale of CW Company owned property…….payouts to the old but defunct execs. Don’t forget that its coming…..And JacMac, if you think the 1.35 billion won’t be discovered, check out this link.
http://wallstreetexaminer.com/blogs/winter/?p=1326
It’s already there in the open for all to see. PIMPING 101
Poppy-
Unfortunately, you are right. This isn’t a wonderful opportunity for BOA. No stars lined up perfectly for this. This is a set up. Look at the CW/BOA history. BOA is the company that gave “tan man” the 75k to start his company in 69′. They are boys from back in the day. Up until Thurs, Angelo was predicting a CW comeback. Please. What. They called him Friday morning and said look why don’t you sell. And he said, ok, why not. Can I keep the jet? I heard what happen in Detroit I might need to make a quick move. (For those who don’t know about Detroit, reference back a few stories)
I said in a previous post, that the blue dust is going to confuse us while the new plan is being rolled out. Now here it is and watch other big banks follow suit.
Let’s see here………..Banks…….Lets create a system only a few understand. Let’s allow some start up lenders to present products to the public we made, but allowed the little guys to take credit for. Let them make some money on it. Let them put it out on the streets for awhile. We won’t call it pimping; let’s call it getting the American Dream. Let’s put that American Dream on the yellow line and then slowly put some bad American Dream out there. They won’t notice. A dream is a dream. When it starts stinking we’ll have another dream waiting.
As the years go on……….and we are dreaming…………….Banks are buying up smaller banks preparing for us to wake up and get mad.
Keep in mind; the big banks are funding the lenders. The system is going to blow right around the time the major banks are the only game in town. They own the retail and they never let go the wholesale. Hell, they invented the wholesale.
We are awake. The system has blown. Or the banks just turned off the lines of credit or the proverbial light switch. It’s ironic, but the entire system blew and all of the “major” lenders blew at the same time. Hmm. Go figure. Bad lenders. Bad wholesale. Bad Industry. The consumer is awake and demanding change. And now, the Pimps….sorry Banks, are swinging in with their bat utility belt on “BAMMING” AND “POWING” their way into the American hearts. They are absorbing what they created. They are not even used real money. They are swapping stocks. This is a pimp keeping his PIMP HAND STRONG. Now just watch in a year or two the new Hos……..no, my bad, the new dream they come out with.
You’ll have to wonder why haven’t anyone and I mean ANYONE gone to jail for all of this mess. Remember the blue dust. A pimp can’t send his ho to jail. And that senator that was so far up CW ass just a month ago. Where is he now? He can kiss my ass for all that noise and no action. The CEO of BOA is hoping that Angelo will stick around and help out. W.T.F. wasn’t this the year Angelo was going to retire anyway/? He announced this years ago. Kind of make you wonder the coincidence
Warning:
Blue Dust is a bitch if used properly. Not to be mixed with other chemicals and don’t operate heavy machinery when hit with it.
Not to appear dense, but what is “blue dust”?
I loved your post Chris – great analogies, just wonderful, right on and the very ugly truth.
Could blue dust be the same as “smoking something stronger than a leafy green substance”, they all are you know, it is ego and power, combined with the vast quantities of greed and lucre. I prefer the word lucre in lieu of money, you know “filthy lucre”, very fitting and apt. Oops my rampant professional cynicism if getting ahead of me……
I agree with Poppy….great post Chris….
Brilliant, Chris. Their dream but our nightmare!
Poppy,
Blue dust is a grand distraction of sorts. It only applies to people. If you try it on a dog or a horse, you might get bit. The leafy green substatnce just slows you down. This is much more potent.
I don’t know if you ever watched wrestling in the 80’s. There was a character called the Great Kabuki. When he was getting his ass kicked, out of nowhere he would reach into his magic pouch and blow dust in your face. It would temporary blind you and have you totally disorientated for a few minutes. Well in that time he would kick your ass “some good” and win the match. When the loser snapped out of it, the great Kabuki was gone with the win.
The cynicism is all we have until we find the total truth
Hats off to you Chris!!!!
I have a very sad story to share…
This week I was informed by one of wholesale lenders ( a very big player) that they discovered fraud with one of there brokers and would no longer accept loans from this broker …end of story!!!!!!!!
I said what did they do??? The broker submitted and closed 5 loans with the same ss# and credit report, but with different borrowers and properties. Clear cut Fraud!!!!! All this lender did was stop them from sending in new files……..I SAID WHAT!!!! I AM VERY PISSED !!!
I said, any charges filed?…….NOPE..
Did you report them to the FBI……..NOPE
Did you go after the borrowers who submitted and signed the applications….NOPE!
How did you not realize that you had 5 loans in your system with the same ss#???? We do not have that safe guard in our system!!! WHAT!!!!
Here is the kicker…WE DO NOT HAVE THE TIME OR RESOURCES TO FOLLOW-UP!!!!!…..I am speechless!!!!!!!!! This broker should be in jail, the LO should be in jail, fines paid, there name made public just for starters!!!!!!
If crime pays it will continue, so with all of these great ideas to disclose more,educating the LO, testing, bonding, fingerprinting, etc……who is watching the lender???????
I AM STILL SICK!!
Chris – I could try it on my dogs and horses, however…..I like them more than most humans. LOL Most likely after all the years in this business not to far from the truth. My professional skepticism and cynicism are on my sleeve, have tried to hide them, but to no avail.
Paul – They are right, we do not have the manpower or time, we are exhausted and beat up. They are scum suckers, whether they are in my shop or someone elses’ shops. We do use tools to catch that stuff on my platform, but an eyeball is the best method I know of to date. Actually as weird as it may seem, when I open that kind of file ya just kind of know. Can not explain the reasons for that, but to date I am batting 100% on the fraud-o-meter. Must be that healthy professional skepticism and cynicism working over time.
Do I catch it all, probably not, do I catch the most egregious, most likely, rather transparent stuff. Do I get as angry as you, yes, is it well received (the anger), no. Read some of my articles – Moe appears to like to post them. Yeah I get real angry and sad, does it do any good, no. Do I feel betrayed, yes. Are we all betrayed as an industry and as consumers and as a community, yes. Leaves you feeling real empty, I am truly sorry for all of us.
Paul:
That has been the problem since I have been in the mortgage business on the operations side (25 years). What you experienced is typical, although there are companies that will prosecute to the fullest extent of the law. I have worked for both types and have always felt that only one instance of fraud should trigger a full investigation and prosecution. It has been said many, many, many times on this site that the lack of self-policing in our industry was one of the many factors in this current meltdown.
Virginia,
Sad but true!
Finally things are inching towards the truth.
Fact 1) The lenders do not want you to fail and they do not want your home. When you fail you stop paying them back money they gave you, and when they take your home they have to take the loss that goes with it.
Fact 2) The lenders do want you to have as much debt as you can handle. This allows them to take as large a part of your income as revenue for themselves. If you stumble now and then, that just means extra fees for them.
Fact 3) The lenders weren’t too quick about getting into loan modifications because the lenders are big, slow, bureaucratic organizations, not because they want you to fail or take your home.
Fact 4) They’re finally getting their act together, which will preserve their customer base of individuals in as much debt as they can handle. Loan modification for the borrower = loss mitigation for the lenders.
Many people got pulled into a bad situation by buying a house they couldn’t afford with a bad mortgage. Loan modification will help keep them in that bad situation to the lenders’ benefit. Don’t believe for a moment that loan modifications are done out of human compassion.
There are exceptions of course. If a loan modification will allow someone to keep their home without the undue hardships of living house poor, on the brink of foreclosure or bankrupcy, and with no leeway to save for retirement, then loan modification is good for both borrower and lender.
“If a loan modification will allow someone to keep their home without the undue hardships of living house poor, on the brink of foreclosure or bankrupcy, and with no leeway to save for retirement, then loan modification is good for both borrower and lender.”
But, you know that this is the absolute, biggest “ifs” of all “ifs.” What percentage of these homes are already seriously underwater? And how many people are foolish enough to believe that this lost equity is coming back anytime soon? In the five years granted by these freezes, it ain’t gonna happen. And even if that equity were somehow miracously recovered, the new lending and underwriting standards are going to prevent refinancing. I mean, come on, who’s going to lend someone making 75K a year, 800K to buy a house – no matter what their FICO scores? That won’t happen anymore.
You are absolutely right, Al. The biggest beneficiarys (sp) of this will be the lenders and lawyers. Lender get to keep people paying their bills for a little while longer until the borrowers finally realize their “bad situation” is interminable. The lawyers will be chasing fraud for years to come – wonder how many John Edwards we’re going to create from this swamp?
Let the housing market crash, let prices drop until median income buys the median priced house. Nobody has to be homeless – there are going to a lot of really nice rentals available for a long time. Even foreclosure comes off your credit after a while.
Prices are going to drop and peole will walk away. I see a massive effort where peole will have loan balances cut $50k-$200k and 2-4% loans as incentive to keep them in their homes. Mark my words Al and WTF? Yeah, WTF is right!
“This is business and also a bit of human compassion mixed in. You sold them or you now service their toxic loan, now give this \’e2\’80\’9chuman being\’e2\’80\’9d, \’e2\’80\’9cAmerican homeowner\’e2\’80\’9d, \’e2\’80\’9cmother or father\’e2\’80\’9d a break and help them stay in their home. Stop lying to the media and American people. When you say you don\’e2\’80\’99t want to take people\’e2\’80\’99s homes, back these claims with real help and data to back it up. The media lip service must stop now!” —
Well, said. I just love the way you talk! . . . and that picture of Borak!!!!
Wow. This is all new to me. I just got off the phone with ‘DirectLender’ who says they have over a 90% sucess rate for loan modifications. We are upside down about 100, 000. We have a 1st that just adjusted and a fixed second. He says it will cost 3200 if we get a modification. Am I dreaming or is this possible. Is there anything I need to look out for?
Expect much more of this in the future, we don’t need a government bail-out for anybody. Lenders need to pony up and do what it takes to keep people in their home, but homeowners need education about home finance 101. No one can expect to refi every year or so and expect their home to appreciate 10-20% every year just to stay in a $600k home for $2000/mo. A much worse situation will occur several years done the road without it.
Unfortunately, those homeowners whose loans have been packaged into a “securitzed loan pool” are stuck. These mortgage back securities (MBS) products are SEC controlled and the loans cannot be modified without a change in SEC regulations. This is reality.
http://en.wikipedia.org/wiki/Securitization
Their modification department may be helping people but their subordination department sure isn’t. We have a borrower we are trying to help with a Chase second. Their first has adjusted to an unmanegable level. We can get them a new FHA first 30 year fixed saving them $400.00 per month but need Chase to subordinate. the second. Problem is although the CLTV (Combined loan to value) was under 100% when originally obtained, due to declining markets they are at 109% now. When you call Chase to subordinate the reps say “Don’t bother sending it in We will decline it over 100%” Even though they are at 109% now. The borrower has never been late on their first or second. It is crazy. What is the sense of that. Zero extra risk and it allows the Borrower to keep making the payments on both loans.
I have an aunt who’s a VP with Chase’s risk management department. She’s told me that Chase has been extremely concerned about the repercussions of the subprime fallout and their exposure, researching 5-6 relationships deep to find out how much they’ve actually been exposed to the toxic loans.
From what she’s said, Chase wasn’t so much involved in direct lending, but they buy up loans to service, and their lending portfolio to other banks and mortgage companies is so large that they’re really getting tough in figuring out how much exposure they have. It’s ironic that the banks are now trying to limit their losses on these loans that they knew would default, but had no trouble riding the upside with no concern to exposure.
At least they’re approving modifications and repayment plans, though, which is more than can be said for other lenders who are just as incompetent as ever.
Here’s my take and take it for what you will….
The housing market needs to reset bottomline and it’s not going to do so in just one way. There is no way mtg companies are going to be able to save everybody, in fact, they don’t want to save everybody. They only want to save people that will save them. They are in business to please their shareholders, not the people that owe them money (borrowers).
Some people are going to modify there loan, some will short sale, while others will foreclose. Everybody is in a different situation and has to do what’s obviously best for them, just like the banks are going to do whats best for themselves. In order for banks to modify or short sale they are going to have to get all of your information once again (ex: asset statement, etc…). So if you’re like me, which is someone who was tried to get a piece of the real estate market when times were good and is now $100k upside down and has a few reserves saved up, my advice would be to walk. If you modify or short sale banks are going to suck you dry of all your reserves, I mean, wouldn’t you do the same thing if someone owed you money? I would, why would you loan someone more money or decrease what they owe you if they have reserves saved up? Whether this is $100k or $5k, you have to ask yourself are you delaying the inevitable?
Here’s my tough part…I have some reserves saved up, but can’t afford my monthly bills, which only consist of two house payments. I am a responsible debt payer with a record to show it. So am I supposed to just drain all my hard work because it’s the right thing to do? It’s a tough call, but with banks only helping people that only have two pennies to rub together, it seems like an easy one to me. Banks are acting like they’re trying to help…in my mind there doing what’s best for them, which is fine, but that’s exactly what I’m going to do too.
Before you Short sale or Foreclose, you should speak with a lawyer and CPA to make sure you understand your situation completely. The last thing you want to do is reck your credit and still owe the differential balance (diff in what you bought home for and current market value)
One last thought to ask yourself….”Will your credit score recover first or will it be the equity you’ve lost in your home?” With me being $100k upside down it’s a no brainer.
TouchCall, great post!!!! Sensible and practical!
What phone number are you using to contact the Chase ARM Unit?
hey… were working as fast as we can.. but yea.. we here ya… and we are seriously modifying as many loans as we can… just takes time to modify a million loans… at least we’re not exposed to the subprime woes as citi or boa or wamu or countrywide… poor souls.. we are also the number 4 lender of loans orignated behind CW, WF, and BOA… so we’re movin up..
Last September , I tried to work out a reinstatement with Chase in San Diego. They refused $5000 down. Then they suggested modification in October and I applied with all the necessary documentation. They lost it. I submitted it again and it took them 2 weeks to enter it. Then there were the fires in San Diego and they evacuated. In November, I was told that I would probably be given a 5% rate , instead of my near 7%.
Just now– 4 1/2 months later (it was supposed to take 45-60 days) , I have rec’d their proposed loan modification. They will not lower the interest rate now (even though the FED has lowered twice in a week) and have tacked on thousand in “fees.” It requires nearly $9000 down and a higher payment than I had before to stop this foreclosure. When I try to call to discuss better terms, there is no one to talk to.
So how is it they are trying to work this out?
JJP,
just keep trying! I’ve been on the phone with Chase for months and I refuse to give up. Are in the Mitigation Department or Collections? Speak to someone that speaks english as their first language.
What number are you using? I’ve been trying to communicate for over 2 months on a loan mod and cannot get ANY cooperation – I have the direct number to underwriting in San Diego which has proven to be worthless – nobody returns calls, it’s as though they didn’t get the memo about keeping people in their homes!
Bullshit. ChaseMorgan bank is not helping people keep their homes. If they were not I would not be losing mine. Also, Litton Loan is a servicer of JPMorgan and when I found out through the courts that JPmorgan is the holder of my note, I had hope. Until I found out the loan modification was getting more money from me. I am paying more to Litton Loan for fees and cooporate charges than I am making payments toward my home. And get this – I am caught up on my loan and have made my payments. They are saying I am a forbearance plan and I am not!!!! What do you say to that!!!! Assholes
We finally just got approved for a modification with Chase. After months of being in the process (since October). Approval consisted of a rate change from 9.8% to 5% for 2 years then 6% for the remainder of the loan. It was a long process but well worth the wait in the end. Keep calling them and eventually things will work out.
We have submitted paperwork (Jan 3rd & again March 21st – they lost ours too) and have been waiting for “Manager approval” for about 3 weeks. I’m extremely anxious to have this entire modification process completed. Seems each time I speak with someone they give me a new name and extension to follow up with but I am keeping the faith and calling approx. every 5 days. I understand everyone is in the same boat but it’s extremely stressful for homeowners when paperwork is misplaced and calls are not returned. They hold our lives in their hands and it is a horrible feeling. We’re trying our best to keep up but it’s a hard struggle.
keep fighting Albert and that means keep calling, faxing, emailing, calling, faxing again and then rinse and repeat till you get results!
Does anyone have a decent phone # for the Loand Mod Dept.? I have 888-311-2703, the ext I was given never answers and I leave multiple phone messages and never get a return call. I am so frustrated!
Chase remodification dept is a joke!!! We went through there whole remod process. Then waiting, then finally, months later approval. Well, our initial payment was at $4,000. We fell behind a couple months. Chase agreed to HELP us save our home. They agreed to remodify, and forgive past debt to them after 1 years consecutive pmnts. we agreed. We just recieved our pmnt arrangements 3 weeks ago, $8,000 a month for 1 year, no negotiation. What? They doubled it?? we’ve called and called everyday for 3 weeks. No one answers, no one calls us back, on and on!! We will be forced to forclose!! was this their plan after all?
Know how some of us feel!! with this modification loan
been trying since oct/07 mailing overnight papers faxing calling
and waiting this week was the last draw… NOT that i have a big loan my loan is 78,000.00 on a arm 10.625 wanted to lower the monthy payment lost my job and with the coat of living so high it was hard to pay the mortgage when u have two childrens it hard,,,,, Well anyway got a letter today of the modification
they lower my ARM to 9.625 making monthly payment $52 lower<hahahahaha I waited 5 months for that… well we are moving out our home we had for 12 years to a home 2 house away rent is 400 month yeah this GREAT
THANK U CHASE FOR NOTHING
HEY TO ((Trish Loya ))
HERE IS THE NUMMBER I USED AND SOMEONE ANSWER
(877-838-1882)) HAVE AN EXT NUMBER 53345 DONT KNOW WNY
NOT THE SAME PERSON ANSWER ON THAT EXT BUT GOOD LUCK
HOPE U DONT GET FUCK LIKE I DID
Seems that people who asked for Load Modifications from Chase Home Finance after January or February got their cases processed more easily.
Its too bad Chase needed guinea pigs.
My case:
$3700 monthly payment included taxes, HoA, and mortgage (no escrow) on $370k.
Next month, interest goes from 6.75% to 9.95%, monthly payments totals $4400.
Even with a load modification to 5% 30-year fixed, monthly payment best-case would be $3200
Should I rent a place for $1500 before my credit is wrecked, dump the home?
You bet.
Here you go Chase, another home back in your filthy hands.
I feel the same way I spent over $57,000 paying on time my house last year.
I wait 7 months for my loan modification finally they approved at 8%. My initial rate was 5.99% This is not really a help I think the person who said that Chase is helping the homeowner is completly wrong.!!!!!
I agree with Katiana 1000%. The people running chase are ignorant scumbags who are just plain DUMB when it comes to this crisis we are experiencing with the housing crunch.
I owe a first mortgage of $320K and a home equity line of $200K thru Chase at an average of 7% interest. I needed to make a decision BEFORE I get bad credit so I called the “experts” at Chase and explained to them my situation. I told them I was NOT behind at the moment but very soon I will be. I told them that the easy way to solve my financial crisis was to do what most people are doing in my situation which is to WALK AWAY! I told them at Chase that if they could modify my present home equity loan with them, NOT WRITE IT OFF, just give me say 1 year with 2% interest only so as I could sell the house and NOT LOOSE MY GOOD CREDIT, then I could do this! THEY REFUSED, PERIOD. They told me in order for them to even consider any modification, I would need to be in default. SO GUESS WHAT CHASE??? I now I am behind 2 months on both my 1st mortgage of $325K, as well as your $200K mortgage which will certainly be wiped when the home finally gets forclosed and sold eventually for about $250K.
I sincerely hope you “bankers” get an understanding as to how NOT to treat homeowners in my situation. YOU IDIOTS LEAVE US NO CHOICE BUT TO WALK AWAY……………….
Hi, I am in the same boat, fell behind due to excessive car repairs & medications that run over $800.00 a month for the months of Jan, Feb, March (over $4000) (when locked out of my insurance for 30days when they decided to raise my premuim for my child form $15.00 a month to $58.00 after 4 yrs) for my special needs Child. In Feb My payments went from 9% @ $710.00 a month to $800.00 a month and up @ 11.25%! Been trying to get someone on the phone with my CCCS with a conference call, all we got were people talking casual conversation in the backround no picking up the phone/headset,(Is this thier way of how thier reps work?) tried a total of 4 times yesterday to no avail, I am behind 3 payments, single parent,(only income) and have yet to find a way try and keep my home, Haven’t given up yet though! I have been with Chase since 05 and with late payments and inquiries (trying to find a fixed rate for over 1 1/2 yrs) my credit score has gone wayyyy down. Is there still hope with Chase? All of our local offices here in GA have closed. Please any advice would be greatly appreciated! My Home is the only thing I have been able have to call my own for me & my children, I have come along way from an abusive marriage to a homeless shelter to working my way hard up a corporate ladder to get my home not for it to be taking away.
I HAVE BEEN TRYING TO MODIFY SINCE JANUARY. I GET THE SAME RESPONSE EVERY WEEK. THEY TELL ME MY LOAN IS UP FOR APPROVAL AND WAITNG FOR MANAGER TO GIVE FINAL APPROVAL. THIS IS BETTER THAN THE RESPONSE OF ITS IN THE UNDERWRITERS DEPARTMENT. I GOT THAT RESPONSE FOR 3 MONTHS. IT IS TOTAL BULLCRAP. MY HOUSE HAS A SALE DATE ALREADY AUG 10. I JUST FEEL LIKE IM GETTING NOWHERE. JUST BE HONEST WITH US WE HAVE ENOUGH STRESS IN OU LIVES WITHOUT HAVING TO WONDER IF YOU ARE GOING TO LOSE YOUR HOME.
Here is my SUCCESS story with Chase. I applied for a mod in December ‘07 and they lost my file. I had to do it again in January. Then, after two months and calling weekly it was “at the underwriters.” After two more months and weekly calling I was being put on a priority list because so much time went by. Finally, a week ago I was successful. I heard I had been approved and the people on the phone really couldn’t tell me what the terms were. Today I got a simple letter:
Your old rate of 8.69% (this was the arm it really started at 6.7% for 2 years) has been modified at the fixed rate of 5.375% for the balance of the loan.
HOLY CRAP!!! I can keep my house and actually got a GREAT rate to boot!
I hope everyone stays with it and can keep their homes.
FYI I was falling behind in my payments more and more over the course of this process. I never got 30 days behind, but I was close.
Thank you CHASE!!