Thursday, August 16, 2007

CountryWide Financial Is In Panic Mode

"The nation's largest mortgage lender borrowed $11.5 billion from a group of 40 banks to fund new loans, in a move that shows just how deep the lending crisis has become."

"Countrywide Financial Corp. said Thursday it made the move amid a credit crunch that has driven a number of its smaller peers to bankruptcy." (AP News 8/16/07)

Will Countrywide go into bankruptcy like many of its former competitors?

25 comments:

  1. We so called "bubbleheads" are just overreactive loons. The largest mortgage company in the U.S. is about to croak. No news here, folks move on.

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  2. Yes, buying a home on credit just got a lot more difficult. Look at this story below.

    Approved Home Loans No Longer Done Deals

    By Dina ElBoghdady
    Washington Post Staff Writer
    Thursday, August 16, 2007; Page A01


    www.washingtonpost.com/wp-dyn/content/article/2007/08/15/AR2007081502436.html?hpid=topnews

    So, is anyone ready to admit that Va_Investor and I knew what we were talking about when we said "act now" to you over the last year or so? Will it really matter if house prices are 5%, 10%, 15%, or more lower ... if you can't get a reasonably priced loan ... or even any loan? Is it starting to sink in why we kept telling you that the worst thing that could happen for you would be for you to get what you wished for?
    Frankly, I think the "bubble of opportunity" that was out there for buyers over the last 6 - 12 months has just closed. From here on in, the picture gets worse for buyers for many months ... if not for many years.

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  3. An interesting stat from a financial webpage. Mortgage resets went from $22 billion early this year to $52 billion in August. But the resets will continue to climb to $110 billion in March of 2008. So the proverbial poo hasn't even hit the proverbial fan yet. Click my name for the link.

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  4. Lance, you really are acting like a knucklehead. If people can't buy homes because of loan constraints, either prices go down further, or homes go unsold. You respond to this argument by saying "declining home prices are different than a bursting bubble." Your words are circular and make no sense. Just admit you paid a crap-load for your home and are mad you didn't buy it at this time of lower prices/better bargining power. Either that, or you are a typical real estate agent troll. Again, I have lived here my entire life and "bubbles" - or whatever one wants to call them - in housing spike up fast and then decline very slow and long, but make no mistake, in the end the correcting will be more than you are preaching, maybe 30 percent or more. It is already happening in the places I was planning to buy and I will wait because even if they don't go down more, overall they will be flat for a while. Loans? I know I can still get one, and who cares about a slightly higher interest rate? The Fed screws with that so often that the price of the home is what I will focus on. Get a fixed term 30 year mortgage and then refinance when the Fed messes with rates again and makes them lower in its effort to influence the market/economy somehow. Yeeesh! This ain't rocket science, dude.

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  5. DC area is down 10% from peak 2 years ago. My bet is for another 10% by the holidays due to this current, and ongoing, crisis.
    Once recession becomes obvious the government jobs will start to show up in various home districts instead of the DC area. That should be worth another 10%.
    Anybody been out to the higher density developements in Loudon, Prince William lately? Landscaping by ReMax, Century 21, Long-Foster. Pretty ugly.

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  6. Yes, buying a home on credit just got a lot more difficult.

    More difficult for those that should not qualify. For those with downpayments and good credit, mortgages are still and will always be available.

    I just called Countrywide the other day and got approved for an 80/20 if I want it (I don't).

    I say filter out the bad credit risks, let prices return to reality, and for those that truly qualify for home ownership, like myself, the party will begin. By then, people like Lance will be filtered out.

    Let's end with a quote made today by U.S. Treasury Secretary Henry Paulson:

    “When you have periods of benign markets, particularly in situations where parts of markets and the economy are growing at levels that are unsustainable, market participants aren’t going to be as vigilant as they should be. One of the natural consequences of the excesses is that some entities will cease to exist."

    Lance, you will cease to exist (in the housing market ownership stance) before this is over.

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  7. Lance, did you mean the opportunity for poverty and being blessed with a fico score of 50 for ten years? That good ol global backup you've been preaching about seems to be toast!

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  8. Lance said "So, is anyone ready to admit that Va_Investor and I knew what we were talking about when we said "act now" to you over the last year or so? Will it really matter if house prices are 5%, 10%, 15%, or more lower ... if you can't get a reasonably priced loan ... or even any loan? Is it starting to sink in why we kept telling you that the worst thing that could happen for you would be for you to get what you wished for?"

    If I find the link from CNN Money, I'll post it...but its better for prices to decline, including for what you currently own, than for rates to stay low and pay through your nose.

    Affordability is the issue. A person with a median income cannot afford a median priced house in most markets now, which wasn't the case 8 years ago.

    Would you buy a beat up Volkswagen for $1 million just because you have a 0% interest rate?

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  9. Lance said...
    “So, is anyone ready to admit that Va_Investor and I knew what we were talking about when we said "act now" to you over the last year or so?”

    Well, if it’s not ole “housing can never touch the global market “Lance””,…… ….you know, I just can’t…….. it’s just too funny. Dude, you’re hilarious.

    Bwahahahahahahahaha

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  10. "A person with a median income cannot afford a median priced house in most markets now, which wasn't the case 8 years ago."

    Corporations and other business entities own more residential real estate than they did 8 years ago. This is especially true in DC.

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  11. It looks as if good ol Ben is in panic mode.The Helicopter is hovering over backfiring and will crash and burn. This small rate cut will panic the market. Sounds to me like the Fed is cutting off the arm to save the hand.

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  12. Countrywide will be in business 5 years from now, I have no doubt about that. Things will get worse but CFC will manage through it.

    Don't forget the provide loan servicing for 1/8 of the entire mortgage market and almost 25% of all Fannie, Freddie and GSE loans. The GSE's will be stepping in soon and that business will grow for CFC.

    Unfortunately for all of you who are predicted CFC demise, the mortgage market requires the Expertise of Countrywide to continue functioning just as much as the it requires the GSE's to be around.

    CFC stock could be a buy should it stabilize... I will buy some when it trades in a $2.00 price range for 60 days... I think we could see it settle around $14 to $16 per share.

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  13. Corporations and other business entities own more residential real estate than they did 8 years ago. This is especially true in DC.

    Finally, the true answer as to why prices have gone up so much. OK everyone: forget all that you've heard about this bubble nonsense. Businesses have bought up everything, and prices will stay on a permanent plateau. Buy now or be priced out forever!

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  14. " ... the traditional cutoff point between prime and subprime loans -- previously a FICO score of 620 -- has migrated upward in recent weeks. Some mortgage companies are posting 680 FICOs as the new demarcation line; others have set the break point slightly below."

    www.washingtonpost.com/wp-dyn/content/article/2007/08/17/AR2007081700991.html

    Credit Score 680+: Excellent
    Situation:
    You have several long-established tradelines which have been in good standing for 6 months or more. You have very few negatives on your report ...

    “the median score in the USA is 680” or something similar


    www.crusaderservices.com/article_08.php

    Ah, the irony of it all! Could it be that when you finally get the price you want, you'll be financing it with a "subprime" loan ... and at a high subprime rate?

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  15. Lance said...
    “Ah, the irony of it all! Could it be that when you finally get the price you want, you'll be financing it with a "subprime" loan ... and at a high subprime rate?”

    But “Lance”, prices never go down, especially in D.C. and your zip code. There is designated DMZ (devalued market zone) that will never creep into the area.

    Furthermore, Ben will just print more money, making us all millionaires.

    Even still, in this global economy, salaries will rise 500-600% in the next 4-6 months matching housing prices, china will save us!


    “buynoworforverbepricedout!!, theyaren’tmakinganymoreland!!, realestateonlygoesup!!”

    And all that jazz??

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  16. Lance:s Quote:
    "Ah, the irony of it all! Could it be that when you finally get the price you want, you'll be financing it with a "subprime" loan ... and at a high subprime rate?"


    Speak for yourself Lance-a-lout!

    What makes you so sure that the posters on this blog, or any of those patient enough not to buy a house in the past couple of years, have less than stellar credit?

    Even if the interest rates for loans do go up, those who are prudent, much like my parents, will pay off the mortgages in less than 30 years of the loan (they did it in 17 years).
    The restriction is against paying too much for the first five years, after that, a borrower is free to pay down the debt and get the house free and clear that much faster, and for less interest owed!

    I did this with my student loans, I paid more than the required monthly payment and eventually paid off the whole thing several years ahead of schedule, saving me the interest that I would have had to pay if I just paid the required payment.

    Looks like Lance has delivered another 'Quote of Questionable Quality'.

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  17. Probably not, Lancie-Poo I have an average 804 Credit Score between all three agencies.

    Try harder, schmuck.

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  18. Increased loan rates equal more downward pressure on home prices. These declines are not going to stop any time soon.

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  19. "I will buy Countrywide when it trades in a $2.00 price range for 60 days."

    LOL. Haven't you noticed the volatility in the market? With the VIX around 30 good luck finding any stock that trades in such a narrow range for 60 days.

    mad_tiger

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  20. Ah, the irony of it all! Could it be that when you finally get the price you want, you'll be financing it with a "subprime" loan ... and at a high subprime rate?

    My credit score is 790 so I'm not too worried. I can and will be able to qualify easily for a mortgage at 3x my income with a low fixed rate whenever I am ready (which is the only mortgage I'm willing to consider).

    Yes, fixed rates are likely to go up, but the drop in home prices will more than offset that. It's funny, prices are already down in the 15-20% range in my neighborhood, yet interest rates have remain basically unchanged. Perhaps fixed rates for conforming loans will remain low throughout the bust?

    The pricing out of the market schmuks like Lance will be the best thing that ever happened for people like myself with good income, stable employment, excellent credit, and a down payment.

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  21. "Finally, the true answer as to why prices have gone up so much. OK everyone: forget all that you've heard about this bubble nonsense. Businesses have bought up everything, and prices will stay on a permanent plateau. Buy now or be priced out forever! "

    A typically unintelligent response for you, game over.

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  22. A typically unintelligent response for you, game over.

    In case you didn't notice the sarcasm, it was a sarcastic response to an idiotic justification for the market's current predicament.

    Now, my non-sarcastic response (make that intelligent for our anonymous poster): Your response is completely useless unless you can provide some hard statistics with references. Please provide.

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  23. "Now, my non-sarcastic response (make that intelligent for our anonymous poster): Your response is completely useless unless you can provide some hard statistics with references. Please provide. "

    Since you're the one whose panties are all in a twist, maybe you can provide some statistics that you're right. Or maybe you cannot.

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