Countrywide Still Asking Consumers To Lie About Their Income

Countrywide would like you to believe that it put all that messy “predatory subprime lending” business behind it and is no longer coaching consumers to lie on their loan applications in order to qualify them for loans they can’t afford… but are they telling the truth about telling the truth? One woman who recently contacted Countrywide about refinancing her home told NPR that sketchy mortgage lending is alive and well at Countrywide.

“It was really every sleazy move in the book,” says NPR’s tipster, an economic analyst turned stay-at-home Mom who has owned several homes in the past and who is married to a mathematician.

NPR’s tipster says that when she told the Countrywide loan officer that her income was low because she was a stay at home mom, he told her that she could lie about husband’s income because he had “manager” in his job title.

“He said he could change it and if it was a manager then the underwriters wouldn’t be as questioning. And I said but our taxes don’t reflect it and his boss will not verify that that is indeed his income, and basically he said: ‘Don’t worry about it. I’ll deal with it.'” She also says that the loan officer asked her to create an entirely fraudulent document claiming that she made $60,000 a year when in fact she was not working.

“I told him that I was extremely uncomfortable doing it, and I didn’t want to,” she said.

Countrywide says it is looking into the incident.

Woman: Countrywide Proposed Fibbing to Get Loan [NPR] (Thanks, Tmoney02!)

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  1. Tmoney02 says:

    Yea! I got a hot tip published! Thanks for doing a post about it.

  2. rmz says:

    Assuming this story is true, and assuming this story is current, I think Countrywide is all out of pity points.

    You want a bailout? No. Not yours. (I wish.)

  3. highmodulus says:

    Oh Countrywide, you have fallen so far. They actually won the J.D. Power customer satisfaction award the year I got my mortgage from them. They were good. I later refinanced to another fixed rate loan at an even lower rate. Again, smooth as silk.

    As a loan servicer, they have been outstanding for over 5 years, perfect handling of the escrow, rapid electronic notice of receipt of payment ect.

    But, the worst bank in the world (BofA) just bought them. And they are pretty relentless is trying to get as to refinance, take out a home equity loan or line of credit. Umm, sorry- we are quite happy with our 5.25 fixed 30 year.

    As a customer, I am afraid what the BofA ethos of hosing the customer for “revenue enhancement” means for me.

    Sigh, stupid subprime mortgages. . . .

  4. B says:

    I’m shocked, shocked. Okay, not all that shocked.
    Go directly to hell, countrywide, and don’t whine about government handouts.

  5. highmodulus says:

    Oops, sorry about the typos. In the words of Ralph Wiggam “me fail English? That’s unpossible!”

  6. pinkbunnyslippers says:

    Oh whatever – what proof of this conversation is there? Are we supposed to believe her because she is married to a mathemetician and is herself an economic analyst? To add credibility?

    NPR should know better than to even spread this stuff without it being corroborated, and so should the consumerist.

  7. nutrigm says:

    umm, aren’t these really “normal” practices in the lending industry anyways? This is what I think: Look at the final figure. If you can afford it, who cares if you overstated your income. Even having sufficient income at the time of closing your loan doesn’t mean squat if you take on other debts irresponsibly or knew from the start you won’t be able to pay for the mortgage. These kind of calculations you need to do it yourself. Loan Officer’s job is to get you a loan and earn commission. Your job is to make the payments.

  8. B says:

    @nutrigm: No, lying about your income is not normal practices in the lending industry. Lenders look at your total income to calculate if you can afford the payments, and from there your risk of default. They look at other information too, like how much other debt you have , your credit rating, your credit history.

  9. Tmoney02 says:

    @pinkbunnyslippers:

    I have a hard time believing NPR would run this story without some background checking. They aren’t some gossip rag.

  10. pinkbunnyslippers says:

    @Tmoney02: Yeah I guess you’re right. But not when they showcase it like some “anonymous tipster” account like this, you know?

  11. evslin says:

    …and who is married to a mathematician.

    Hahaha.

    “My name is Monday. I’m a mathematician.”

  12. mergatroy6 says:

    whats with the deleted comments?

  13. I’ll do that for Countrywide if Countrywide is a decent-looking chick I’m talking to in a bar. In which case, I’m also lying about physique and whether or not I have a job or car.

  14. ChuckECheese says:

    I’m living in a rental house, and my landlord/homeowner just took a cashout refi on the house. I was quite surprised, as property values are dropping and there are unsold houses, foreclosures and unused rental homes all over town.

    There is still an irrational exuberance over real estate here, because people claim that the Ft Bliss soldiers shall come in droves (it’s called a “buildup” and is talked up much among local politicians and our state reps) and these soldiers will snatch up all the vacant property.

    The problems with this scenario, which nobody acknowledges openly, are that there are no soldiers available for a buildup, as they are all in Asia or in prison or working at call centers (and will not join the military unless they are drafted), and at the moment, Ft Bliss is building soldier housing at breathtaking speed. There is also the problem with having undeployed soldiers and their weapons stationed in residential homes all over town, but I’ll leave that one for the shrinks and the police.

    I figured you couldn’t get such refi on a rental home, except of course, the owner told the bank that she is living here. I know this because the banks sent the paperwork here to the house–for the record, I’ve never met my landlady and have no idea where she really lives. I didn’t even know my landlord was a lady until the envelopes arrived, which I browsed and tossed in the trash. That, and the home inspector who came here and did a 10-minute inspection on behalf of the mortgage company, ignoring the $50,000 in work that needs to be done to this home, including the foundation repair, the roof replacement, and the leaky swimming pool. My point, if there is one, is that it sure looks to me like real-estate denial and mortgage fraud continue. How else will they survive?

  15. scoli83 says:

    @highmodulus:
    Bank of America has not bought Countrywide yet. Countrywide is still an independent company, though Bank of America does intend to purchase them.

  16. woodenturkey says:

    @rmz:

    i heard this story this morning (5/06/08) on npr as i walked to work
    and the lady said this happened recently

  17. highmodulus says:

    @scoli83: Thanks. Countrywide has accepted the offer right? So it is just a matter of time.

    Still, I will enjoy my BofA free existence as long as I can.

  18. scoli83 says:

    @highmodulus: This sort of buyout would need to be approved by the DoJ.
    While Countrywide has agreed to be purchased, nothing is set in stone. BoA could still walk away or renegotiate the price.

    It’s not inevitable that BoA will buy Countrywide, but it is highly likely.

  19. mikeunwired says:

    This has been going on in the mortgage business in some way for decades. I know loan officers who used to keep blank tax returns and W2s in their desk drawers back in the 80s. They would manufacture income to meet the need. This is what happens when you pay people on commission. And, this is why I got out of the business. I was unwilling to chat to make loans happen.

  20. whatdoyoucare says:

    I am shocked! Shocked I tell you…that anyone would want to do business with Countrywide. I am not usually a blame-the-victim-type person, but REALLY? you would trust them? Give me a break.

  21. Orv says:

    @ChuckECheese: Not to mention that, if property values go way up, soldiers aren’t going to be able to afford them anyway. I mean, soldiering doesn’t pay that well, except compared to other jobs you can get with no higher education.

  22. whoareyou says:

    Is it just me or does their logo look a lot like Enron’s with the middle finger removed?

  23. Radoman says:

    I trust Countrywide. They rock.

    Even if this story is completely true, (questionable)the article references one loan officer at one Countrywide branch. Countrywide offices are abundantly located through out the country like 7-11s. If you are unhappy with your loan officer, the smartest thing you can do is take your business elsewhere.

    Still not as bad as the “Countrywide vs Direct TV / puppies” thread.

    I’m a big fan of Consumerist but I just don’t understand the obsession with Countrywide. They’ve always been an exemplary lender to me. Now if Bank of America takes over Countrywide, I’m sure the business will suffer both service wise and financially.

  24. Aphex242 says:

    @whoareyou: As has been stated on previous threads, this is what passes for ‘humor’ on the Consumerist. The actual Countrywide logo is a multicolored house.

  25. BigElectricCat says:

    @highmodulus:

    No. In fact, it’s looking like BofA is going to try to renegotiate the deal for better terms, or else walk away. BofA has indicated privately that it doesn’t like the idea of assuming/guaranteeing of Countrywide’s outstanding debt, which probably indicates a desire on their part to do the deal as cheaply as possible and not get fleeced by buying Countrywide. If Countrywide won’t sell itself cheaply, IMO it won’t get bought at all and will go BK.

  26. oyvader says:

    I heard this story on the radio this morning and immediately thought of Consumerist. :-) I’m glad someone else was awake enough to think of passing it on. :-)

  27. hi says:

    sooo… this means I can get a loan right? sweet!

  28. highmodulus says:

    @BigElectricCat: Thanks for the information!

    I am hoping maybe Countrywide stays independent by using the proposed BofA deal to help keep its access to capital until the debt markets stabilize.

    I like Countrywide as a loan servicer, they are top notch. I could really live without constant attempts to lure me into new loans, but I understand why they are doing it.

    If I needed another home loan, I would certainly go to Countrywide first (they are also a VA loan provider, another big plus IMHO).

  29. highmodulus says:

    Decided to do some more research on the status of Countrywide- this was pretty good:

    [money.cnn.com]

  30. surgesilk says:

    @ highmodulus
    BoA has NOT bought Countrywide. They made an offer to buy the company and that offer is currently under review due to the value of CW.

  31. Me - now with more humidity says:

    radoman: which branch do you work at? or are you with corporate PR?

  32. EmmaBean says:

    I had a similar experience at Wells Fargo a few months ago. My boyfriend and I were approved for a loan from the lender that deals with our real estate agent, but we wanted to make sure we were getting the best rate. We tried Wells Fargo as we both bank there. The man that we met with told us that there was “no way” we could qualify for a loan. Then he suggested that we try a “no-document” “stated income” loan and put our incomes as what they would be when we finish school (1 year for bf, 2 years for me). I asked if we would qualify for a standard loan if my father gave us some money, and he told us that if my dad would sign something, we could just “say” that he had given it to me and report it as an asset. This was the point where I got up and walked away. My boyfriend, who is going to school for accounting, stuck around to chew out the guy for being a sleazeball. Needless to say we stuck with our agent’s lender.

  33. dmann99 says:

    I’ve been with CountryWide for 4 years. No problems here, customer service has been decent, and terms were reasonable. I bought a house that was a lot less than what I qualified for so there was no number fudging required.

    I am refinancing with my state Credit Union this month. Rates are a little better and they hold all their own loans. I trust the CU loan origination a lot more than CountryWide’s.

  34. Shadowman615 says:

    @ChuckECheese: What are you babbling on about now? Soldiers who are in asia or at call centers and don’t want to join the military unless they get drafted? Huh? Weapons all over the town?

    That doesn’t really make any sense…

  35. rmz says:

    @aphex242: Oh my god, lighten up a little.

  36. ChuckECheese says:

    @Shadowman615: You have my symapthy Shadow. I know how hard it is to read more than a dozen words at a time. Drawing conclusions from dry inference is even harder, and when you have to do both at once, it can lead to sores from head-scratching. I’ll explain in brief paragraphs:

    The point of that post is that it appears–around here at least–that all the characteristics that created the real estate bubble, including speculation, hype, fraud and pie-in-the-sky, are still going strong.

    You still there Shadow? Go get a cup of water or stretch if you need to.

    I took the time to explain that there is still mucho real estate speculation here, because of an idiosyncratic circumstance, which is, people here are being falsely led to believe that there is going to be a large inmigration of soldiers who will buy/rent all the available housing.

    But the Army Corps of Engineers is building new barracks and homes apace for any soldiers who will eventually land here. And another poster replied to my post, explaining that most soldiers can’t afford speculation rents or inflated house prices anyway. Right?

    Shadow, if your eyes are getting tired, just look out into the distance for a minute or two. Or you can lie down with something cold to put on them. Come back when you’re done, K?

    Iraq and Afghanistan are in Asia. That’s where a lot of our soliders are right now. That means they can’t be here living in the houses. My comment about undeployed soldiers was an inference about the potential social troubles this area (and America by association) might experience when the troops do eventually come home.

    Then as another example, I talked about my landlordlady, who recently took out what appears to be a mostly fraudulent refinance mortgage on the house I’m living in. The assessment was a sham and didn’t take into account some obviously needed expensive repairs, or the fact that she doesn’t live in the house.

    She had the loan docs sent to my place as if she lives here, which she doesn’t. It makes a difference to the bank and to the loan terms if you live in the house you’re mortgaging, or not. I didn’t say it in my original post, but I bet some due diligence by the mortgage bank would have uncovered some of these irregularities.

    Shadow, you’ve been reading hard. Go take a break. We’re almost done, so let me know when you’re back.

    Shadow? Shaaaaa-doooooow! Where’d you go buddy? Shaaaaaaaaa-doooooooow!

  37. scoli83 says:

    @ChuckECheese: You can’t draw a conclusion from an inference because an inference is a conclusion. However, you can draw a conclusion from an implication which is an attempt to indicate a fact or opinion without doing so directly.

  38. Torley says:

    @whoareyou: I reckon that’s a cheeky parody, and not Countrywide’s actual logo (which has the outline of a house). But I agree about its Enronic resemblance.

  39. Radoman says:

    @Me / leewaters: Ha hah. So, because I am a happy Countrywide customer, I must be corporate PR? Funny. Why single me out? Others in this thread say they like Countrywide as well, and you didn’t accuse them of being schills. Were my comments simply too appropriate and convincing?

    Countrywide didn’t try to sell me a subprime loan when others did. I, like many others, am a happy customer and would do business with Countrywide again. I feel the honest need to defend a company that’s always done right by me.

  40. Pennsylvanian123 says:

    @BigElectricCat:

    Actually, Bank of America plans to offer Countrywide a great fixed price and then after the deal is done they will consult their contract and find they have the option to slash the price by 60% and charge Countrywide a penalty fee and a fee to process the penalty fee. That may put Countrywide in default of the agreement which means Countrywide will have to pay Bank of America to buy them out and cover their attornety’s fees.