The biggest lender isn’t going under, but it is going under new ownership, and as goes Bank of America, so goes Countrywide. Call it the "clean-up of Countrywide."
Here’s the difference: Countrywide was the everyman lender, out on the street, dealing with brokers, correspondents, promising everyone and their sister a loan with the kinds of products that are now coming back to bite them.
Bank of America was far more conservative in its lending--trying to steer clear of risky loans and questionable borrowers. So now Countrywide falls under the BofA model.
What about jumbo loans, since the credit crunch has curtailed Countrywide's ability to do them? Well, some of my mortgage gurus are telling me this may open up the jumbo market for Countrywide, given that it now has all that BofA cash behind it. Bigger loans, better borrowers.
What happens to modifications? Countrywide has been really aggressive in helping troubled borrowers get out of loans they can’t afford. Does that change? Consensus seems to be no. BofA will restructure the loans that have to be reworked--maybe even better than Countrywide, some analysts say--and take their losses.