Reacting to the bankruptcy rumors, Countrywide spokesman Rick Simon said, “There is no substance” to them “and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company.”
So, if you’re seeking better interest rates, and are morally flexible about who you give your money too, look for companies that are in dire need of an infusion of cash. Who’s the predatory lender now? Don’t you feel cool?
Last week a clutch of protesters sang parodic carols outside the Goldman Sachs Christmas party at the hoity-toity BLVD club to protest the companies involvement with subprime mortgages.
One of the nation’s biggest mortgage lenders, Countrywide, admitted to a Pennsylvania judge that it had fabricated some of the evidence supplied in a homeowner’s bankruptcy case. The evidence in questions were a series of letters the lender said it sent to the homeowner notifying her that she owed $4,700 because of problems with escrow deductions. The homeowner had filed for Chapter 13 bankruptcy and the mortgage debt was discharged after she met the terms of her 60-month bankruptcy plan. But then later Countrywide told her they were foreclosing on her house because she still owed them money. They said they had sent her three letters notifying her of the debt. The homeowner, her lawyer, and the Chapter 13 trustees say they never got them. When Countrywide produced the letters it supposedly sent, the homeowner’s lawyer noticed that the ones addressed to him didn’t have the address of his office at the time; they had the address of the office he had moved to AFTER the dates on which the letters were said to have been sent. What a bunch of crooks.
Although December marked a slight decrease in Chapter 13 filings from November, 2007 overall logged a whopping 40% rise in the number of bankruptcy filings compared to 2006, reports the Wall Street Journal—over 800,000 filings in 2007, versus around 570,000 the previous year.
Credit Slips’ Adam Levitin takes a look into the possibly even grimmer future of the housing market. We’ll let him explain it because he’s smart:
…this graph from Credit Suisse is the most sobering thing I’ve seen in a while. Mortgage_rate_resets It shows that most of the interest rate resets ahead aren’t subprime, but are instead Alt-A and option-ARMs…
Steve Carrigan is in charge of economic development for Stockton. He says bank loans made it a party every day.
It’s not new news that the housing market is in the dumper. That’s generally good news for buyers, but shall we say less than optimal if you’re looking to sell your home any time soon. So what’s a seller to do? Looks like creativity is the name of the game. Sellers are dipping into their handbag of tricks to try and unload properties worth more yesterday than they are today (and worth even less tomorrow) Here’s a sampling of what sellers are doing:
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Smart Money has some new scams to watch out for, in particular, con artists trying to take advantage of people in foreclosure. [Smart Money]
The web is full of opinions listing the pros and cons of making extra mortgage payments, but there are surprisingly few pieces on how extra payments impact your mortgage payments. Turns out that the answer depends on which of the four main types of mortgage you have. Yahoo Finance gives thoughts on each of these including standard fixed-rate mortgages, standard adjustable-rate mortgages, interest-only mortgages, and home ownership accelerator loans. A few interesting highlights listed from least responsive to most responsive extra-payment home loans:
One of the dangers to watch out for when buying a home are the various kinds of fees that can crop up, and comparison shopping these fees is not always easy. Now there’s a new site that gives you a reasonable baseline you can expect, specific to your area and property deal. Input your transaction, property and occupancy type, purchase price, and zipcode, and FeeDisclosure.com will tell what various fees you can expect in getting your mortgage. Much-needed transparency for a notoriously murky and shark-infested industry.
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FTC takes heat for giving credit bureaus a special exception that allowed them to make lists of people who just filled out a loan application and sell them as leads to subprime lenders. [USA Today via U.S. PIRG Consumer Blog]
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Woman loses house to foreclosure because her lender underestimated her escrow. [South Florida Sun Sentinel]
Foreclosure tracking firm RealtyTrac has announced November’s foreclosure numbers and, while foreclosure activity is down 10% from last month’s number, the news isn’t happy. Foreclosures are up 68% from November 2006, with 201,950 foreclosure filings—up from 120,334 this time last year. Also worth mentioning, last year’s numbers weren’t exactly low—they were up 68% from 2005.
The Fed proposed new sub-prime lending rules designed to protect consumers from predatory lending practices, in the future. You know, because the most important thing is to prepare for the next sub-prime meltdown. Critics were quick to lambaste the plans:
The Fed has unanimously approved a new plan to tighten provisions designed to prevent predatory mortgage lending, as well as help to decrease the number of consumers who irresponsibly take on debt that they cannot afford to repay.
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31 people in Florida were indicted in a complex mortgage fraud scheme that installed scammers at every level of the transaction, from buyers to sellers to bank employees, title agents, and appraisers. [NYT]
Stephen O’Brien wants to buy a foreclosed apartment building on Warwick Street in Roxbury. He wants to keep the ground-floor tenant, James Evans, 77, who is partially blind and living on Social Security.
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