Welcome to the new way of putting muzzles on homeowners that can shed some light on Countrywide’s widely known practice of customer abuse. Fix their loan in record time, give them a deal they could have never have thought of in their wildest dreams and make them sign a confidentiality agreement.
Such as the case of Mr. Dan Bailey from Wilmington, North Carolina. You can read his full story here, told in Dan’s words. He tiltled his forum thread “This is what mozillo thinks.”
I broke the Angelo Mozilo “disgusting” email story on Monday and was shortly followed buy the LA Times and then hundreds of news outlets across the world. What Dan thought was just an accidental email from some dude at Countrywide that really pissed him off, actually turned out to be the best thing that has happened to him and his family.
Monday night and Tuesday morning the press was all over the story. Requests for interviews were many, but they all wanted a piece of Dan and his plight against Countrywide. They wanted to get the man behind the most famous hardship letter in history to tell his story in his words. In fact, I did too.
But there was one problem. Dan wasn’t returning my calls or anyone’s calls for that matter. It was as if he dropped of the face of foreclosure earth.
Then late in the day yesterday, I get a call and it was Dan.
Cool guy, about my age (36) and he started off the conversation by saying how thankful he was for me and my website. How he felt is was divine intervention and that all this happened for a reason. He spoke for a few minutes about his struggles for 7 months and how he finally mustered up the courage to research what he can do to save his home and came across my website. He told me how he has never in his life written a hardship letter, let alone negotiated with a creditor. But, my forum gave him the tools and education he needed to start fighting.
We spoke for 20 minutes as television crews sat outside his home.
Up until yesterday, Dan didn’t even know who Angelo Mozilo was. He thought he was just some dude that worked at Countrywide and he was upset becuase at the time, he was just trying to do the right thing, when — oops — Mr. Mozilo sends him an email that wasn’t meant for his eyes.
How often do we all get to see an inter-office communication from the head CEO of the largest subprime lender ever that really shows what he is thinking and what other staff members MUST converse about on a regular basis?
Here is the email comment from Angelo Mozilo, that started the media frenzy:
Angelo_Mozilo@countrywide.com wrote:
This is unbelievable. Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the internet. Disgusting.
Dan Bailey
05/19/2008 06:37 AM
To Angelo_Mozilo@countrywide.com
cc
Subject Re: bailey acct# XXXXXXXXXInteresting to find that you think my letter is disgusting. I will send this on….
danXXXXXXXXX@yahoo.com
CC: Steve_Bailey@Countrywide.Com
Subject: Re: bailey acct# 073822537
From: Angelo_Mozilo@countrywide.com Add Mobile Alert
Date: Mon, 19 May 2008 06:41:34 -0700This has already been sent on to our senior manager who will determine the facts behind your request and he will take the appropriate actions.
Not only was this sent to senior management, it was also sent to the guy with the super duper freeze gun. The mysterious Super Hero who comes out at night and in the name of PR and saving Countrywide face, fixes the abused borrower’s mortgage and makes them sign a “confidentiality agreement” in their blood. A quick pinky swear and the job is done and the damage “covered up” yet AGAIN! Or is it?
Here is his next post in the forum:
I received a phone message to call “Carra” from the office of the president ext#5745. I had checked out for awhile ysterday and heard the message this morning. Tried calling but I guess they are on California time? Her message just said they received my e-mail and to call.
Guess I will try again after my noon meeting.
Does this really give us all an inside look at what the guys in glass houses (Mozilo) think of Joe Homeowner on the street? Disgusting they say! “Let him suffer his fate” as they sip champagne and cash in their massive stock portfolios earned on the backs of hard working Americans who are now suffering in every area of our economy.
I think it does. You can’t cover up what has been done and said. Yes, they can silence Mr. Bailey, but they can’t silence Moe and the media that is shining a big spot light on their fat-cat asses.
Then we have these adversarial and out spoken, full time homeowner critics that I like to call “homeowner haters”.
They go out of there way on a daily basis on the blog-o-sphere and information super highway to spread their homeowner hate.
The spew words like, “People who don’t bother to read or understand what they are signing do not deserve sympathy or assistance” and “Get a life, there is nothing wrong with what he wrote. You are coaching people to tell lies and admit they have no common sense. You support people that cheat the system and don’t pay their mortgages. YOU ARE DISTGUSTING.”
This is just a taste of the daily comments and emails I receive and unfortunately, Mr. Dan Bailey experienced on my blog.
Here is Dan’s response to all of the haters:
This is Dan. Everything I wrote in the letter to CW is true. I do have equity in my home(40-60,000 + the sweat equity of re-modeling it myself), I never took a 100%loan out on it, I have been paying my mortgage for 16 years.
He concludes his brief internet blogging career with:
No, I don’t have granite counter-tops. No, I did not refinance to get a new boat/car/vacation, etc… No, I did not refinance 100% of my equity. I needed the small amount I got out for an emergency-which is none of your business. For all of you assuming I have a huge beautiful home, re-read the letter, or read it for the first time before jumping to conclusions.
I equate it like this: I wasn’t feeling well, so I went to the doctor-the expert…the doctor said, “take this medicine, it has been helping everyone with the same symptoms. They’ve been taking it for 3 or 4 years now, and it can only make you feel better and cure you, then, when you feel better/are cured…we’ll take you off the medicine. There’s a possibility of side effects, but dont worry- so far everyone is taking it and it can only get better.”
One year after taking the medicine , it is found to cause cancer.
Yes, I took the medicine of my own free will. I listened to the advise of the expert. It was my choice. I was warned there may be some slight side effects….now it’s killing me.
I’m not suing the doctor..I’m just asking for a cure from the medicine he gave me.
I’m not reading these blogs/forums anymore…you people only make me feel worse.
Hey Dan! If you are reading this, don’t take all this personal. These haters are just miserable people who like to make other people feel miserable so they have some company out there. Stay sober, take care of your family and enjoy your home man. You are a great guy, who deserves whatever great deal the Countrywide Freeze Super Hero gave you.
Another home saved. Another life brought back to normal. And when all is said and done, that is all that really matters.
{ 47 comments… read them below or add one }
you go MOE !!!!!
I am so lucky to have found your forum a last month and I am still on my journey, but I do not feel alone. I feel that everytime I pick up the phone to make a call or write an email I now know that I am not alone.
I did not cashout on my home, I do not drive fancy cars, ( i have a 92 & 95 dodge) I happen to have had the misfortune of being laid off & was unemployed a little over 8 months & with one salary in Miami, FL, it does not go far. I used up all of my reserves to meet the daily needs of the home and children.
I have been blessed with finding a great new job, although the salary is lower, I am grateful to help bring income to my home to help my husband. I have sold my dining room and formal living room furniture last night to make this months mortgage payment, because we are falling behind. I am hoping that if we are able to get our loan modification we will be able to save our home, continue to work and raise our kids.
I am happy that DAN was able to save his home and life !
Some of us here are really trying to do our best in this shitty economy. !!!
I hope Mozillo (more like godzilla) will take this as a lesson and truly have his staff at CountryWide help those of us in need.
Thanks again Moe for having the balls to always say what you feel and allow the rest of us to do the same.
Carrie
Miami, FL
I wonder if people will ever realize after blaming the banks that first and foremost, they purchased way more of a house than they could afford. Rather than buy a home that they could afford, they gambled on the market raising the value of their homes. Now they are all finding it difficult to pay off their mortgages.
I suppose common sense doesn’t count for anything especially when greed takes over.
Whatever happened to “personal accountability”????? I realize and understand that many on this forum have had certain hardships and perhaps were led astray by a rogue mortgage guy. But the numbers show that a large majority were using their homes like an ATM and inflating their income to perpetrate the FRAUD. We should NOT legislate the masses for the benefit of a few. The repercussions (also the unintended consequences that will surface) will far outweigh any benefit.
Go to hell and rot American Dream and JOE!
Thanks Carrie!
Your my kind of people.
You know, the ones that are “real”, “caring”, “compassionate”, It’s nice to hear your words of encouragemnet in the land where few people dare to walk.
Someone has to speak for you all that are truly suffering as a result of a damn loan.
And all the Homeowners Haters who are spewing your typical garbage, get a fricken life!
Hello, I too have been fighting Countrywide for the past 9 months with no results, I have been trying to get the media attention to show the injustices that Countrywide is pulling. I am an escrow officer so I know about the business. I am currently trying to get a rate reduction, my rate is currently at 9.8% my payment is at $4,000.00 a month unbelievible!!!
Please Help I would like a fast response such as Dan got.
Hey Moe,
Wanna bet that most of these “homeowner haters” are really lo’s who are afraid that they will be in the cross hairs next?
For the others here, I am doing the same thing as Moe, and many of my clients are going for law suits. These are people who were genuinely defrauded by dishonest lenders and lo’s, and not just people who rolled the dice and gambled. i am helping them, making little money, but happy to be of service.
BTW, Moe, spoke with Scott and waiting for your call.
Pat
Moe, what the heck does the title of this idiotic piece have to do with anything you’ve said? How specifically did Countrywide buy Mr. Bailey’s silence? Have they offered to modify or forgive his loan yet? I don’t know because you say absolutely nothing about that! You just have this flaming title to draw attention to yet another attack on people who disagree that all lenders are evil and borrowers are saintly, misguided, misled, victimized buffoons. You are the one who treats the people you are purporting to help as real morons incapable of taking care of themselves and making the kind of informed, intelligent decisions that over 95% of the homeowning public has made and continue to make.
Dan, you are 100% correct in saying it is none of our business why after 16 years of homeownership you made this really bad choice to leverage your home on a loan you did not understand. You claim to be an adult, therefore it was your responsibility to educate yourself on what you were doing. The fact that you didn’t speaks volumes – I doubt it would have mattered. For whatever reason you wanted/needed the money and you would have taken any deal that promised to deliver it to you. So, live with it, try to get Countrywide to modify your loan, whatever but stop blaming the the rest of the world. Didn’t they teach you that in recovery?
Carrie, while I really feel for you (too many people in this country are one or two paychecks away from disaster), the fact of the matter is, people lose jobs or lose income or they lose marriages or they get sick and suffer financial hardships. It happens even in good economies. It doesn’t stop the bills from coming due and lenders don’t lend money with the stipulation “pay as long as it’s comfortable for you.” They lent you that money based on your financial standing and the value of the asset at that point in time. Changes in your financial well being or loss in value of the assest does not entitle you to a reworking of the contract for better terms now. Sorry about that. If your lender will agree to work with you, that’s great – it may even be a win-win – but they are not obligated to. They don’t “owe” it to you or anybody. If your circumstances have so changed that you can no longer afford this house – then get rid of it. What if they freeze your rate for a few years and things don’t work out? The price of housing may never recover to the levels it hit in bubble areas like yours and you will always be underwater. Isn’t taking a rate freeze just another gamble? If you take this gamble are you going to come back in five years and accuse the lender of misleading you into a predatory modification? What if you have to relocate before this “mythical” recovery of the housing market? What if … all kinds of things happen. Modified loan or not, you are stuck with a severely depreciating asset.
You know, the folks that bought houses in bubble areas like California and Florida between 2003 – 2006 did get screwed but not by lenders. They got screwed by the insane inflation of housing prices. We (loosely defined because a vast majority of us homeowners in non-bubble states are doing just fine) are in this mess because of the price of housing. The only way out is for housing to come back down as dramatically as it went up. That’s going to be painful for a long, long time but that’s what happens when you gamble on things like housing bubbles. Instead of trashing each other, let’s just all own up to having had some part in this, take our losses, lick our wounds, and try to do it better next time – if we’re even given a next time.
BTW – just so you know where I’m coming from – I am a homeowner (really, no mortgage) in a nonbubble part of the country who paid for my current home by selling a house at the height of the bubble in California and I had one or two or three refinances on that one, so I played the game and got lucky.
I have a couple of questions that I wish the author would answer:
1. Did anyone force this buyer to purchase a home?
2 Is there a mandate in the U.S. for people to buy homes?
3 If you were buying the largest item of your lifetime, would it not make sense to consult with a family member or other professional to give you a 2nd opinion?
4. Is it not a “moral hazard” for banks to change the terms and conditions of there original loan documents?
5. When home prices were rising, did any of these homeowner’s complain about the terms of their loans?
6. Is it the government’s responsibility to bail out homeowner’s or bank’s that made irresponsible choices?
If you answered yes to these questions, than my understanding is that you would prefer a socialistic style government that comes
to “everyone’s” rescue when times get tough. The problem with that solution is that it will take away the “incentive” based society where those who work hard are rewarded. One other thing to note: if fraud was involved in a transaction, that is a totally different issue. However, allowing banks and borrowers off the hook for poor decision making or unfortunate circumstances is a moral hazard which will do much more harm to our country than a government bailout. This is a classic case of supply and demand. There is no more demand, therefore prices must fall, and everyone (except those who made prudent and conservative choices) must take responsibility for their decision making. I would like to hear the author’s response to these comments.
I am fighting a foreclosure for over three years now on a reverse amortization loan. This means that Countrywide now wants $50,000 more than the loan was worth in the first place despite me making regular loan payments. Did I mention that Countrywide lost insurance checks they were meant to endorse. My house is only worth $100,000. Countrywide has spent more than that on attorney’s fees trying to take my house away from me.
I testified in a Federal Court case in April. It was a suit filed against Chase and BNC. The judge wanted to know how the 2 year adjustable ARM worked. The lawyer could not explain it, so the judge recessed the court over a weekend and ordered Chase to get a person in to explain it.
Chase sent an “expert” out from Chicago to San Francisco for the hearing. The “expert” could only describe the initial start rate and the cap. She could not explain how it worked.
I got on the stand and explained it from A to Z.
If the “expert” from Chase could not explain it, and most lo’s could not explain the programs, then how in the world could a borrower with no experience be expected to understand it?
Could you nay sayers answer that for me?
Great Story Moe. Sadly the ignorant and arrogant like Mazilo and those who blame the borrowers for being force fed the kool aid need some serious soul searching. Good job and continued success. You may want to post the list serv thread I sent you from real estate lawyers!
Nye
Since Dan had his home for 16+ years I am sure quite a bit of equity was built up. So when he chose to refinance, what were his reasons for doing so and where did his equity go that he could not refinance again to where he needed to be? If the loan to value was there, something is missing here that did not allow Dan to do what was right in the first place. Hmmm, can I cash-out of my house today and then follow suite with what Dan did and take the cash and run? I know things come up in life and all that that can cost money but the fact remains, Dan is the one who chose to sign all those disclosures and then the actual loan docs at closing…what part did he miss prior to his recission period. Did he not have the time to read over his loan package or at least browse over them to make sure he did the right thing.
This Countrywide bashing drives me nuts because I am almost certain that a broker must have pulled one over on him. Actually, I bet he did his loan over the internet. Hey Dan, who made the original loan for you? Keep in mind that Countrywide has purchased billions worth of mortgages from broker business so they are not always at fault. You can look at your little broker shop on every corner (well formerly every corner as most have had to shut down due to regulations and licensing requirements).
I look forward to hearing Dan’s responses. Oh on another note, how did Dan get all of those CW email addresses and why did he send an email to them when that is not the proper channel? I went through the HOPE Team and never once dealt with any of those people.
I am so glad that I happened on to this website wish I would have found it sooner. I to am a Country Wide customer, totally disgruntled. Even though there is no help for me now at this late date as my house forecloses on May 28th. I am glad to know that I am not the onlyperson they have deceived and basically refused to help while the big wigs fill their pockets.. Country Wide has never done anything but give us the run around.
I still look forward to Dan’s response to my previous post above. Every time I post someone tends to come in and throw out another CW bash. Hey Dan, please give us a shout out and enlighten us a bit so we have a much clearer picture of what happened to you and why?
To the person who can’t figure out an ARM, it’s real simple as i see it. It affords you a shorter period of cheaper payments while you wait for one of three things…1)credit improvement so you can qualify for a low rate fixed mortgage 2)an income increase or 3)you can’t afford the house on a normal fixed loan…Option one makes sense if you actually do the things needed to fix your credit. The other two options are for morons. Never bank on income you don’t have yet and the third speaks for itself. The problem is that most (not all) of the sob stories you hear about are from the morons. Stop trying to keep up with the Jones’ and live within your means. If that means renting then so be it. There are worse tragedies in life. If you already made the mistake and are losing the home for reason 2 or 3 then just deal with it. Owning a home is not the only important thing in life. Technically your were only renting it from the lender in the first place. Now you don’t have to live with that stress anymore.
You all make me laugh.
Lets all complain about the big bad banking industry, the really screwed us a good one. Yet, everyone and I do mean everyone I know has a good mortgage, equity and isn’t playing the victim card. I know exactly why. They used the thing on top of their neck when deciding who was going to finance their home and how it was going to be financed.
If you can’t smell a crook or a liar when dealing with these situations you will have a rough go at life. Utilizing a little common sense in the decision making process goes a long way.
Patrick, you have hit “a nail” directly on the head. Not “the nail” as IMHO there is more than one nail in this coffin known as the housing crisis. In full disclosure, I am a Mortgage Provider and would like to list a few more nails that are in this coffin…
All politicians as they are culpable for all that is bad in today’s UsofA. They couldn’t make this whole debacle right on their collective best day
1) Unscrupulous Loan Providers Bankers & Brokers alike
2) Bait & Switch advertising, Lending Tree, DiTech, Lenox Financial they are ALL wolves in sheep’s clothing
3) Pushy, unprofessional Real Estate Agents who fueled bidding wars.
4) Stupid Borrowers whether they are purchase or refinance clients
5) Lying and deceitful Borrowers whether they are purchase or refinance clients
6) Wall Street for allowing this to go on and turning a blind eye in the name of profits
7) Greedy Investors on Wall Street for not doing their investigative homework
Man, I could go on…Everybody is affected by this mess, I for one think it will get much worse before it even starts to get better…I would willing be wrong in that statement…
Loan and credit extension evolution.
I don’t know if homeowner haters are homeowners themselves. I doubt it.
Lets take a moment to reflect on the evolution of credit marketing and the effect on a typical FTHB (first time home buyer)… which is the 1st step in the process of a well-versed homeowner all the way to investor / flipper. Everyone starts somewhere…
so you want to buy a home? you need to be advised. you take your old man’s advice and insist on a 3oYF, you don’t know the broker made ysp and learn to appreciate the joys of screwed up escrow accounts, tax increases, the chimney liner you didn’t know was about to kill you in your sleep… ah the good life!
the next thing you know there is a barrage of ads in all forms to leverage your home. you know a little what to look for… become a value shopper for loans you do not understand. the brokers/lo’s you speak to range from idiot/knob to genius/super LO… but the way I see it (yes, I originated loans) is if you tell a borrower the truth, and they can’t decide who is lying, they may as well go with the offer that sounds better and assume the one who has a higher rate is the liar.
its 2005, yea you made a mistake. may as well try again, a little the wiser. after all, every time you shop you are offered an incentive to obtain credit (10% off your purchase if you open a credit account TODAY! — sound familiar???? or do u live in some other country?)
extended on debt. all from peer pressure, the allure of ads, marketing… and don’t say you are an adult and know better. it is what is expected of you, you ANTI AMERICAN FUNKERS how dare you blaspheme MY COUNTRY the USA by telling people they are stupid for expanding our economy by partaking in consumerism! Thats the whole GD point you socialist freaks!
well… you spent so much on credit your DTI sucks and if you want to refi now you need to take a 2/28 BUT DONT WORRY YOU CAN REFI IN A YEAR OR TWO
that is whats truly disgusting
all u at home raise your hand if that was you on the other end of the phone. don’t be shy.
The moral of the story… I have seen successful BROKERS (whereas success is defined as making large sums of money) who cannot to this day explain TILA, RESPA, NEG-AM, or even competently work a few pricing engines let alone close a loan with Provident (or even know how to start one)…
there were and are many good conscientious loan officers. they lost out to the liars and scammers and those who misrepresented because the regulators were asleep at the wheel. how dare you blame the homeowner at large. I will grant you that some are playing it up and knew exactly what they were getting into on a gamble but that is the smallest fraction of a % of them, and it is not fathomable to react according to punishing the masses for the actions of the marginally fractional.
guess what? most people were ’sold’ into a loan, because people who know loans and don’t sell are the ones who actually close them! the salespeople most of the time could not process their own loans.
need proof? how about almost 1 million NOF in 5 months of year 2008.
anyone hating on homeowners… i think u need a chimney liner.
Awesome post by Chuck…Another nail struck!Especially about the borrowers thinking the truth is always the lower rate…
man if the people only took the time to read up on YSP they would NEVR shop with the question “what are your rates”
Go to work and pay your bills, Bernie.
Most customers got caught up in the oncreadiable rising markets and took out loans that didnt understand. Mtg brokers, were in in for a qick buck or quick thousand bucks, making 3-4 points on neg am loans that they didnt explain to the people that they ripped off. I know , I was a whosale rep, that couldnt live another day watchin brokers rip of unsuspecting customers. I am all for personal repsonibility, but come on, not explaining such a diffuclt program to a customer just to make 3-4 points per deal is why most brokers are now parking cars.
Angelo mozillo is a con artist and scum bag, most of ctw mgmt are also scumbags. bank america should tell all of ctw mgmt to bug off.
I guess I have to respond to all of this correspondence again:
1. If the “tooth fairy” said that you would be able to buy a $2,000,000 house with only $200,000 down, and the minimum payment would be $4,000 a month, would you, by chance, consider questioning the terms of the home loan?
2. Who is the person that signs the note and deed of trust that is recorded at the county recorder’s office?
3. When you were “given” stock options worth $1.00, and then they were worth $100, and then they were worth $1,000, then they dropped back down to $1.00, would you? a) blame the company for having such a volatile stock. b) blame yourself for not taking some profit or c) blame the government for allowing the stock to be so volatile.
4. Do you regularly feel that you are being “taken advantage” of by corporations, the media, and the government?
If any of these questions make you think about the reality of your situation, then you are on the right track. If you are confused or feel “mislead” about advertising, or someone trying to sell you something, maybe you should seek some advice. If you bought a home or a stock at the peak of the market, who is to blame for that? When you sign your name on an important legal document, and do not take any personal responsibility, what do you expect. The end result of this credit meltdown will be the truth: a) Americans have the lowest savings rate of all democratic regimes. b) Americans think it is their right to own a home, not a privilege. c) Americans never complain when things are going there way, however, as soon as the markets turn in a negative direction, they want to blame everyone else for their poor decisions.
Hopefully, when this whole debacle is over (or we become a socialist country), people will learn to take personal responsibility for their actions. Until such time, all of the responsible citizens will have to pay for the mistakes of those who chose to make unwise financial choices. Those are the facts, and there is no “sad letter” that will avoid the facts. No one is forced to buy a home, and when you purchase a home, there is a responsibility that goes with that decision.
LOOK IN THE MIRROR……..THAT IS WHERE THE TRUTH IS!!!!!!!!!!!
And to add to what WTF said: You are not entitled to own a house. If you can’t afford then you should not be homeowner, there is nothing wrong with renting. Stupid people.
Nye – “force fed the koolaid!” What the hell are you talking about? Why do you and your ilk continue to insist the rest of us all morons and idiots that must be protected by you? Nobody force fed anybody anything. They drank the koolaid willingly, blindly, and even with great gusto. The biggest thing they are pissed off about is there’s no more koolaid left – can’t get anymore HELOCs or refinances to bail their dumb asses out of credit card debt!
Still looking for more insight from Dan Bailey. If he signed a so called Confidentiality Agreement, why would he have jeopardized the agreement by contacting Moe on this forum and explaining this info to him?
WAY TO GO ‘CHUCK BEEF’ you are atleast being honest & putting it out there !!!!!
I was in the mortgage industry for 6 years and got out 2 years ago, I was disgusted by the way everyone got Greedy and didn’t give a shit about the person or their family.
Now Granted some of the borrowers did know exactly what they were doing, because either they were going to flip the property or cash out as much as possible & take the money & run
But for those buyers who truly wanted to buy a property for their family got screwed on many levels.
You should know as well as anyone else that those documents are hundreds of pages and most borrowers do not understand the lingo, so they’ll ask their mortgage broker or realtor or lending tittle co., or lender etc. to explain this to them and trust that their advice is correct since they are the professional. I have seen first hand how some Loan Officers & Lenders have sugar coated the loan or straight out omitted explaining Negative Amortization or how an arm really works. They have told the borrower exactly enough for them to sign and receive their hugs commission checks. lets face it most Loan Officers and others in this field couldn’t explain ’shit from apple butter’ when it comes to explaining an ARM or Neg Am. or how am MTA (pick a pay) really works and affects your principal amount etc….
I have even seen when a borrower asks what is the YSP (Yield Spread Premium) on the POC (paid out of closing) and they borrowers have been told – that is nothing in that column – that is a bank figure or whatever they can come up with. everyone is to blame, especially the greedy lenders who came up with BS programs like NO Doc & stated/stated knowing full right 90% of those loans were BS. and they looked the other way, winked and made their money.
& now that the shit hit the fan !
Well guess what everyone is paying for it one way or another…. Lets find solutions
Moe you keep doing what you are doing !!!!!!!!
Chuck Beef – i like your style !:-)
& MR. Great North – if you look at the other post Mr. Dan Bailey answered your question —
It’s just sad to see people like American Dream and JOE jump to idiotic conclusions on almost no information.
Yes, there are probably people who bought homes that they new would stretch their ability to make payments; and cause them to fail if things turned sour.
But, there are also unscrupulous lenders who make it hard for the many honest ones.
There are also people who bought homes substantially below their ability to purchase if their expectations on staying employed, or healthy, or un-sued, or not arrested, etc., etc. Plenty of the things that life throws at us are unexpected and unpredictable. You can get arrested, tried and convicted without being guilty (though I’ve never been arrested), you can lose your shirt in an unworthy lawsuit (knock on wood, it hasn’t happened to me), you can take a sudden turn for poor health (thank god I’m healthy), but I have been unemployed since buying my home; twice! Neither time was it because I was incapable, untrustworthy, unproductive, etc. It’s just the Bush economy and years under a Republican congress.
Also, BTW, there are plenty of people who are brilliant in their area of expertise, above average in most other subjects, but are still bound to be weak when it comes to the intracacies of contract law. We cannot all have law degrees or be finance wizards with everything else we have to handle nowadays. You flamers are complete ostriches if you think otherwise. I hope it never happens to you, but you’ll deserve whatever lack of sympathy you experience when it does.
It’s not enough to just say, “Well, they shoulda known better”, or “Next time read the contract more carefully”, or “take a lawyer with you next time”. Things can still go sour no matter how prepared you thought you were.
“…try do do better next time” my a**. It simply wouldn’t matter in many cases. Everyone needs a place to live, and we’ll do whatever we feel forced to do to keep our families in reasonably good and safe housing. Who wouldn’t do likewise?
Lookinthemirror, your questions were all lame. Does anyone force you to breathe or eat? Was the government responsible for bailing out Bear-Stearns? Just another case of someone who’s been lucky, so far. I’d wager that your choices haven’t been any better, or probably any worse, than mine. Stuff happens. Get a brain.
BrianH, your response was also laughable. So,how very large is this circle of everyone you know? What section of what state do you live in that doesn’t have some sob stories? The affluent should be smart enough to try the “walk a mile in their shoes” mind game. Will you feel the same if you’re wiped out in the next six months?
Now, I’m still in my home, despite being unemployed for 13 months, back to work for 2 years, and off for another 3 months. I know too well how things can go sour. It’s only because each time I’ve changed jobs, my income goes up significantly, that I’ve been able to hang on. That 13 months was a killer that I don’t want ever to revisit. I didn’t make it on my own, but only with some help from people whom I’ve helped.
If you’re not part of the solution, you’re an unfeeling part of the problem.
I am the first person to say that you should know what you are getting into. However, as a former Escrow Officer and current mobile loan closer- I know what these people are told by their loan officers. I have completely competent customers that put their trust in their mortgage professionals. With any of the ARM products they are told they can refi in a year-they are told this like it is no big deal and they believe it. If you are not up on mortgage lingo the average person relies on the mortgage professional. I saw so many loans in the past 7 years or so that I couldnt even believe the borrowers were approved. When the buy expresses uncertainty they are told anything and everything to push them into the deal. Also, no one ever thinks that home values are =going to go down. THey are the one investment that the average person and average realtor/mortgage person believes will never go down in value. A lot of these people took these ARM loans knowing that they woudl just refi before the arm period ends. These folks never thought the homes would depreciate-just like most of the genereal public. Also, the mass forclosures in any given neighborhood will drive the prices in that area right down-Is this fair to the people who are in good standing with their mortgages ? Im not sure the gov’t shoudl bail out homeowners or not but I changed my mind quickly after the bear stearns bail out. Any government bailout would help all americans not just the ones in foreclosure. The lenders were loaning to just about anyone-even if they had no income they would fabricate one and do a NINA loan. And remember a lot of these borrowers did not buy big fancy houses but very modest houses-they just wanted the american dream and their realtor and lender told them everything was fine and they would be fine. Not everyone is highly educated on these issues and they pay a realtor partially to have someone to guide them and protect their interests, or so they thought. I work on the front lines and I know what these people are led to believe-and it is not pretty. I was actually fired as a closer for honestly explaining documents to borrowers and telling them I would walk away if it was me. This is the pressure that employees in this business are under, too. You get that loan closed or else. I am an honest person but it is scary to lose your job and then maybe your home as well. In closing, it seems to me that the more wealthy one is the more harshly they judge. How do they understand anything when they have never had to settle for anything ? I never thought of myself as someone who wanted too much government but this just needs to be legislated, plain and simple.
This is a direct response to Doug’s email:
1. You don’t have to be an “attorney” or “finance professional” to make smart business decisions. You just need to be smart enough to ask someone smarter than you to review your loan documents before you sign them.
2. You should probably be a renter, rather than a homeowner, because you obviously did not have the aptitude nor ability to own a home.
3. Now that you are having problems, you want to place the blame on “everyone else”.
Here is my advice to you: SELL YOUR HOME BEFORE THE MARKET GET’S WORSE! If you ever get in the financial position to purchase a home, please make sure you do your homework. I believe that a very small percentage of people had unlucky circumstances, and you may be one of them. Purchasing a home is not for those who are risk-averse, or who do not realize the basic law of supply and demand. Finally, please learn how to take personal responsibility for your financial decisions.
This is a final comment to Doug:
What does “breathing and eating” have to do with owning a home? Those are two completely different issues. One does not have to purchase a home in order to live. One does need to breathe air, and eat in order to live. You are really out of touch with reality. I am concerned that you even took the step to purchase a home. What in the world were you thinking when you took that step? Again, Look in the Mirror!!!!!
Look in the mirror, the current housing market is a direct result of the fundamental laws of supply and demand (on the part of lenders) being thrown out the window.
Grab some windex and a few paper towels and go look in your in own mirror.
Tom-
You must be joking. Do you know what an asset bubble is? My guess is that you probably bought at the markets’ peak, and are now upside down, and want to blame the bank/broker/real estate agent that “sold” you down the river. Get a clue…..YOU ARE RESPONSIBLE FOR YOUR FINANCIAL DECISIONS! If it appears too good to be true, than it probably is…..my 8 year old son can figure that out.
I would be interested to hear about how you were “misled” or “wronged” by someone to get into the position you are in?? I do find it very interesting that people never complain about their financing terms when interest rates are low, and the value of their asset is increasing.
Again, I would love to hear your personal situation, and how you were taken advantage of……LOOK IN THE MIRROR, that is where the answers can be found!
Patrick-
A quick response regarding your testimony on the 2-28ARM. If you read any “note”, it specifically spells out the terms of a loan. A 2-28ARM is fixed for 2 years’, and then turns into a variable with a specific margin tied to a specific index that adjusts at a specific time frame (i.e. 1 month, 3 month’s, 1 yr., etc.). The note has a lifetime cap on it which is the maximum interest rate the borrower will have to pay over the 30 year term. It sounds pretty simple to me?
The borrower or someone who can give them financial advice would be wise to run the start rate payment, and the lifetime cap payment. Therefore, if they can not make the payment if the loan were to go to the lifetime cap, they should not apply for that loan. The best advice would be for them to rent a home. Again, am I missing something? This is not brain surgery. The reality is that bank’s offerred up enticing terms to unsophisticated people who agreed to borrow money before receiving any “third party” advice, and now are stuck in situations that they regret. This has been going on since the beginning of time……no amount of government regulation is going to stop the human emotions of greed and fear.
Hopefully, the next generation of homeowner’s will look before they leap!
Lookinthemirror – BINGO!!! You happen to guess right and make some great points, but you overlook the big picture. Certainly is an asset bubble though, but don’t you think some ‘finance professionals’ engineered this mess? Exactly the guys I want looking over my next loan. Yes, I realize I have myself to blame for my personal situation but this particular event has not been going on since the beginning of time, at least not in the housing market. And the mess is much bigger than just me. This is a Wall Street-ism and I’m sure there are plenty of smart guys wearing suits with Harvard degrees sitting in a bistro on Fifth Avenue someplace right now wondering how they got this all wrong. Yeah, I’m an idiot and can blame myself for my own personal mess but when it comes time to make ammends and I live in a non-recourse state with a home worth half of what I paid. Brokers and realtors are middlemen, I don’t blame them for setting ficiticious prices, some may be dishonest but I was quite happy with mine anyway. Others may have a different view, not sure. Let’s assume for a moment that only I and the lender (and for example’s sake let us assume the lender is one individual) you tell me when the deal is done who is the idiot in the room? And no, I am not happy about the mess I’m in but don’t you think the lender(s) has some incentive to perhaps lose less? Maybe not, but the guy/gal at the end of the transaction can look in the mirror all day long but that isn’t going to get us any further down the road. You talk of socialization, the banks are going to socialize the losses to us all in the form of higher interest rates, lower savings rates, and inflation with or without the governments help. Unfortunately, there’s no way to escape the negative side effects – its just how much loss are we all comfortabe with. Foreclosure increases the losses, and in non-recourse states that means more loss and less recovery. Unfortunately, I’m not the only guy with this problem – it is widespread so if you’re saying that every individual at the tail end of these transactions is the party with the most blame and the most to lose you’re not quite seeing the big picture. With regards to making a smart ‘business decision’ in many cases the borrower now holds that card.
I think you need to go and install a few more mirrors in additional places as your target audience may find blame in themselves but can do very little to make ammends in many instances.
My 2 cents.
AXJ, the national consumer rights organization, is getting involed in this matter. Apparently employee witnesses are coming forward to denounce the push to take borrowers out of good fixed rate loans, and put them in bad ARMs because “they were more profitable for the company”. That is truly disgusting.
who to blame…
1. the members of the housing commitee that sold their souls to the finance industry authorizing the most unscrupulous loan programs in credit qualification terms.
2. the FHA regulatory department for implementing rules and regulations in accordance to those programs.
3. the secretary of housing and the president for ratifying such practices.
4. the secondary market for all their lobbyist efforts to push those programs.
5. the mortgage industry for taking advantage of such programs without any clear conscience of the type of bad product were offering to their clients.
6. the mortgage brokers and realtors for perpetuating such practices and in many cases engaging in fraudulent activities ,in which by the way, lenders, brokers, homeowners, appraissals, escrows, title companies, even friends of the borowers were involved with full knowledge or assertive silence to the fraud and deceitful acts committed.
7. a good portion of the american people that participated actively in such practices.
but for the most part our government is the one that started all this mess, as a regulatory entity , their responsibility was to oversee that bad products do not get into american’s hands, like the fda with food and medicines, they not only failed completely, they were sold to the big corporate entities for an election for bush, and our government made promises and they delivered, how can we trust a department as FHA for the last 8 years, were the secretary of housing is a crook?
part of winning the 2000 elections was to appease to those that had an interest in creating these products, they told us that the medicine was not only good, it was the perfect american dream.
the failing point in many of the comments about blaming borrowers, lenders, brokers, escrows, etc, fails to understand that nobody knew the future, they made decisions based on the current state of affairs at the moment…if I know that an ATM will shoot me in the feet if I withdraw cash tonight, then I will not do it, but nobody knew or understood what the future was going to be, everybody tought this was a new deal for america.
however, it was the responsibility of our government to at least forecast, but for 7 years our republican controlled government said nothing, and when the democrats won both houses, big fat corporation saw an end to their marketing of their lousy products, they ran.
Look in the mirror …
I think you don’t completely understand the magnitude of the mess this country is in. Not just the borrowers.
It is very easy for you to blame the borrower only,and that is part of the problem.
I am not saying that there are those borrowers who are completely at fault, Like the ones that purchased homes to flip them for a profit or cash out as much as possible.
Look in the mirror, did you know that there were developers that would buy some of the homes cash in their community at higher a much higher price to then turn around and be able to sell the rest of the project at higher prices. The appraisal pushed them toooo. the Realtors did the same thing. The mortgage brokers & lenders also…
I do feel bad however for the borrower that was manipulated and misled to purchase the loan. I for one did not understand my initial paperwork, much less the closing documents(100’s & 100’s of pages) with lingo I could not understand, so I asked my broker to explain the program & he BS his way through it I know now. the Title company could not even understand half of the closing package. So I was asking the “Professionals” for advice & I have heard & heard again this brokers & lenders at lunches stating how they tell the borrower just enough to sign , or do not divulge information.
The borrower is not to blame on this BS products & subprime loans. It is the bank & others who profited grately while looking the other way, when they knew full well half of those loans would die within the first 2 -3 years. You all know who you are !!!!!!! They would even tell the borrowers – look no points up front — (without telling them they are givig them a much higher interest rate to make their money on the YSP).
So YES i do believe there are many people suffering due to this crisis, everyone is to blame. But we need to find solutions.
here is an idea lets redo all the loans and give everyone the prime rate fixed for 30 years. no pre-pay, no BS charges on all the existing loans. …. Better yet why doesn’t CountryWide go through each loan and make the necessary adjustments so people can continue to make their payments and keep their homes?
Crazy concept, but I think it is better than telling a homeowner to not pay and lose their home to foreclosure & be on the street with their family. That sucks. The economy is way too f***ed up right now. Recession, Foreclosures, gas prices keep increasing the price of food & gas keeps increasing.. the sales taxes, irs taxes keep going up…. but our income does not. When we bought our home we did not forsee these increases and the decline in property value….
our DTI (debt to income ratio) is completely out of wack compared to last year.
Tom-
I understand your situation, and I do feel sorry for you. Unfortunately, it is the exact same situation that occurred in 2000 when people purchased stock at the peak, and then saw prices drop 20%. Many people thought that the prices would come back, so instead of making a nice profit, they became greedy, and when the prices continued to fall, they lost everything. My advice to you is to sell your property NOW. Granted, if you walk away, the lender can not go after your personal assets, however your credit will be ruined for several years’.
You are blaming this whole mess on “financial professionals.” The reality of the situation is that you purchased an over-priced asset at the peak of the market, and you can not service your debt (or you are choosing not to). It is really that simple. If you continue to blame the “system”, you will continue to be burned by that system. The lesson to be learned is not to purchase a home in which you cannot afford the monthly payments, or are not clear about the terms of the loan. Unfortunately, we will all have to pay for this mess of “easy lending” terms, and buyer’s that did not make intelligent choices. Instead of wasting time blaming the system, you might want to make some wise moves to put this debacle behind you.
Lookinthemirror,
“Finance Professionals” was your term used above, I just borrowed it from you. I’m not blaming anyone – you’re doing the blaming. I’m trying to find solutions, and the one you recommend also requires the approval of the lender. Your points are skewed and you offer credible observations, no solutions, and like to point fingers.
What is your relationship to this mess?
Are you involved or do you just enjoy bashing homeowners?
Tom-
1. You are blaming others. You claim that financial engineers created this problem. You are incorrect. They may have facilitated it, however, it was created by people who were either: a) misinformed b) incredibly naive c) just plain ignorant.
2. My relationship to this mess is that I purchased a home in 2004, and took a loan out that I knew I could afford, and I am incredulous at the amount of irresponsible people who put themselves into a position in which they could not help themselves. Now, the responsible home buyer’s (which there are many) find themselves in the position that they will have to “bail out” the irresponsible ones (not all are irresponsible, however, I would venture to guess that about 95% of these situations are due to the above-mentioned type of buyer)
3. The only exit strategy that I see for the economy is to bail out these people. Unfortunately, this will take years’ to unwind. My solution would be for the banks to “write down” the debt level by 25% for homeowner’s who can prove that they can not afford the payment on their homes. This way, people can stay in their homes, the values will not fall as quickly as they have been, and the bank’s are penalized for making the loans to easy to qualify for. However, at least they will have some value to their asset (the mortgage), rather than zero, which would be the case if the buyer walks away from the property.
This seems to be the only alternative on a macro scale to deal with this problem. The larger issue is that American’s have a net zero savings rate, our government and the people (the people modify their behavior from the government) are up their eyeballs in debt, and many in our country think that homeownership is a “right”, not a privilege. That is the reality in which we live in. I do enjoy bashing people that don’t take financial responsibility for their decisions. I would recommend you read the book “Rich Dad, Poor Dad.” It might be helpful.
Alexin-
You make an interesting point with your facts. The one important item that you fail to address is that NO ONE IS REQUIRED TO BUY A HOME. You can blame our government for everything if you want to, but at the end of the day, the government is not signing your loan documents.
Of course, there is corruption within governments. If you have travelled around the world at all, you might notice that our system is probably the least corrupt in the world. Do you honestly believe that a Democratic Congress and President will be any less corrupt than a Republican Congress or President?
What facts do you have to make this claim?
Each American has to take personal responsibility for the situation they are currently in. They must sell their homes if they can not afford them. If the mortagage is worth more than the home, than they must make a business decision on whether they should allow the lender to foreclose on them, or choose to keep making payments on a depreciating asset. The consequences of foreclosure are an impaired credit record for several years’.
Americans need to start SAVING instead of SPENDING money they don’t have. This will be a bitter pill to swallow, however, unless we would like to live in a Socialistic style society, this is what must happen. The alternative is to have a society in which there are no incentives to work harder or achieve success.
You should have a look at some other countries such as the former Soviet Union, Cuba, and North Korea as examples of what happens when the power is taken away from the people.
I would like to hear your response.
Carrie-
I understand the magnitude of this problem. As to the solution, the banks must write-off a portion of the mortgage balance for homeowner’s who are unable to make their payments. The only problem with doing this is that it is a moral hazard, and some time in the future, if this cycle repeats itself, it will allow banks (that are federally insured) and homeowner’s to try and use the same tricks to get themselves out from under after making poor decisions.
My hope is that some banks will fail for allowing their underwriting standards to become irresponsible, and homeowner’s that chose loans that were too expensive for them will either a) sell their home or b) walk away from the home, and allow the bank to take them back. Unfortunately, the government will not allow this to happen, although this is what happens to all businesses that fail. The term is called “creative destruction”, and it happens every day in corporate America. Companies fail due to a plethora of things: competition, poor customer service, and products that don’t meet customers’ needs. It is a sad thing that our country has become only a service economy, and it looks like the financial “shell game” is up, now it is time to come up with some solutions out of this mess (see above). Good luck to you.
Lookinthemirror,
You know it turns out that we really see quite the same thing, although the lenders have been reluctant to do much of anything as it is my belief they are waiting for government intervention themselves.
Screw Countrywide!
I just found this site: http://www.AngeloMoziloSucks.com
i say lets help dan out……
lets get together and all not pay our mortgage for the next 6 months and threaten to hand over the keys or better yet mail them all in to the white house.
We could organise it as MOVE ON.org
wait that name is taken…. i know we will call it the :
NATIONAL DAY OF DEFAULT.
Where we all stand up to the lenders and say
“go ahead take my house”
Imagine if we can get half the homeowners to do this….the lenders would have to respond with modifications to avoid a complete collapse of the system.
who’s with us??
we must shut down countrywide or at lest brake there back how do we get to geather and for a no pay suport grope for good pay wont lower intrest owners