Countrywide: Now The Mortgage "Rescue" Firm?
So there’s a big press conference today to announce how Countrywide Financial is getting together with its harshest critic (until now) NACA, the Neighborhood Assistance Corp. of America.
The Boston-based consumer advocacy group has been at the forefront of assistance for beleaguered borrowers, and has also been calling for a boycott of Countrywide, not to mention holding protests outside its local offices.
According to an agreement between the two, Countrywide will be required to reduce some borrowers’ payments to “affordable” levels, affordable being based on individual analysis of each household’s issues by NACA. NACA has 33 offices nationwide.
Bruce Marks, the head of NACA, reportedly said this will help tens of thousands of Countrywide borrowers, and he also says he’s looking to make the same agreement with other lenders.
This is all after Countrywide already announced earlier this weekthat it would refinance or modify 16 billion dollars worth of loans held by about 80,000 borrowers.
All of this sounds well and good, but I’m still asking, how can Countrywide do this when they really just service the bulk of these loans? That is, they deal with the payments, but they don’t actually own them.
Remember, the whole reason we got into this mortgage mess is because these loans are sold to big banks that securitize these things and buy and sell them. So wouldn’t all the banks have to sign off on each loan? And how long would that take? I mean, these things are bundled into massive packages.
I’m also noting that nobody is mentioning prepayment penalties in all of this. What about that?? I’m trying to get answers from Countrywide, but amid all the press releases, no one there will take my call.
Questions? Comments? RealtyCheck@cnbc.com