Amusing and (perhaps) Troubling

[DeadManCrawling]

Hi everyone!

It has been a while since I posted here, though I have read with great interest many of the unfolding stories.

It seems that as this board goes, so goes America at large. The subprime meltdown continues, Wall Street appears to be in a high-speed nose dive without even realizing it.

And the amusing part?

Our lender, Countrywide, is on the cusp of their own bankruptcy, it seems. They drew down 12 billion in unsecured credit to continue funding new loans and current operations until some liquidity reappears. No doubt it will, but if the market conditions do not change in perhaps 6 months, Countrywide is probably as dead as a dolphin in the Sahara.

We are dragging our feet and thumbs like neanderthals, trying to delay filing a 13, perhaps going for a 7.

Our home payments are current, never been late.

Now, what happens if we file and almost simultaneous, Countrywide itself goes under?

Seems like a perfect time to renegotiate, perhaps to a 40 year term or lower rate. Anyone have any experience with this?

Also, what typically happens to a lender's portfolio? Of course SOMEONE assumes it, but this rapidly deteriorating mess is leaving fewer and fewer companies with the ability to weather such a storm.

Personally, I smell government bailout, which leads to the question:

Try to renegotiate a better mortgage deal now, with a struggling company? Certainly they will know when we file BK and may be more inclined to work with us, rather than risk the possibility of us walking away from the house and leaving them one more piece of dead weight.

Or:

Wait for the possibility that the entire shack of real estate cards crumbles and the government is forced to act?

I am not normally a fan of governement involvement. It usually stinks of socialism, but I kinda think it may become necessary in this case.

Any thoughts?

Best wishes!

-dmc

[lrprn]

Hey, DMC, long time, no see - glad you stopped by!

Countrywide's potential bankruptcy is going to send ripples through the mortgage community - they are the biggest lender in the country. See http://www.latimes.com/news/printedi...ines-frontpage for the details.

Hard to know how this will impact individual home mortgage owners like yourself. If you call today, they are probably not going to give you anything but the standard spiel about renegotiating. However, if the downward slide continues, then it's worth a shot for sure.

[SinkingFast]

I can only relate our own experience with CW from going thru Foreclosure with them. CW does not bend.

Another Member here when I first joined worked for one of CW's biggest competitors. She explained to me that CW doesn't really hold many of their own loans. Investors do. And that's why CW can't negotiate. Their hands are tied by their agreements with their Investors and the Investors call the shots.

Now if you can get someone at CW to tell you who your Investor is,........... Maybe you can negotiate better terms directly with your Investor.

[sara4]

I agree with IRPRN and sinkingfast, I had a foreclosure with CW in my bk as well and they had even agreed to sign a loan modification which I signed since they screwed up and actually gave me a set % rate verses the rising sub-prime rate from my original loan, however they caught their mistake but by then I had already decided to not keep the house. I must admit the housing market seem to be getting worse each day but I also must say I HAVE NO LOVE FOR CW and would love to seem at least their Sub-prime market go bellyup since they sure know how to put the srews in you when you least expect it. My story is of course just that my story but I say, file the bk then try to negoitate with them I think that would work better. One things for sure, THEY HAVE A LOT MORE HOUSES GIVEN BACK THESE DAYS!!! Best of luck, I'd talk to my attorney before calling them and trying to arrange anything just be careful in signing anything without legal adivce first!!!
Sara4

[CBC123]

I know that banks and lenders are now calling customers who have an ARM loan to see if they would be able to make the payment. If their customers are not able to afford the payment hike then they talk about a loan modification. On another note I know that one company is blanket covering their customers and automatically switching (loan modifying) their customers ARM to a fix or at best a 5/25. In most cases it should reset to a fixed rate at about 7.25%. Dont know if CW is doing this. I too am with CW and have had many challenges with them even before filing BK13. I would hope now that they would feel as most of us do and have some compassion on us filers and work with us.

[JRScott]

It is good to hear some of the lenders are taking steps to avert disaster for many homeowners. Being Proactive will save those that choose to renegotiate with their clients and thus allow the client to stay in the home and keep the home off the markets.

However the housing problem is just one part of the overall problem.

In the last 46 years the US Government has only had a budget surplus 5 years ( 1969, 1998, 1999, 2000 and 2001). In the other 41 years the government spent more money than it took in. 13% of the budget last year went to pay interest only.

We here are all in bankruptcy or near it. You can't make it on interest only. The government has made huge promises for entitlements to the baby boomers who will be retiring in the coming 10 to 15 years. The costs of these programs are going to balloon. We don't have the money because the government has not been wise stewards of our money.

We have yet more promises of more entitlements from some of the presidential candidates. Why promise more entitlements when you know you can't afford to pay the already promised ones? and yes they know that the government can't meet the demand that is coming.

How the shepherd leads is where the flock will go. The US citizens have followed the lead of their government. They have incurred record high level of debt combined with a record low level of cash reserves.

For years probably since the latter part of the Clinton years our economy has been boosted primarily by debt. Only now folks are starting to wake up and realize we can't continue at the pace we have been. I hope we can avert something like the Great Depression, but I fear if Americans don't realize soon that you cannot keep on living outside your means soon that we are headed for very deep trouble.

[BKOnce]

Right now, money for Iraq is #1 priority on their list.

[JRScott]

Right now, money for Iraq is #1 priority on their list.

Even if there was no Iraq the budget would still be in negative territory. Its a lack of fiscal restraint in Washington.

[lrprn]

Its a lack of fiscal restraint in Washington.

Amen, JR! Let's be honest....when the only way a politician can get elected and stay elected in this country is to make money promises to voters who want whatever they can get from the government without caring about the long term consequences will be or wondering where the money is coming from, then national bankruptcy is what results. Ironic too that the crushing debt in this country has worsened considerably while the party that touts itself as the fiscally responsible one was in total control of both houses of Congress .

Frankly when will we, the voters in this country, be strong enough as a group to say NO MORE!!!????

[JRScott]

Its not just the Republicans, the Democrats are just as guilty. Remember their promises to fully disclose earmarks and clean up Washington in the last election. Remember how quickly that was swept under the carpet.

The problem I think lies in that we allow people to spend tens of millions of dollars to get a job that during their term they will earn less than 2 million.

Congress is way out of control.

I would like to see the 17th Amendment repealed restoring the original way Senators were elected. Adding a clause that if the State Legislatures fail to send a Senator for more than 3 months the Governor of the state shall have the right to appoint a Senator until such time as the Legislature appoints one. (By removing the populist vote of the Senators you will return their loyalty back to their states rather than to their poll numbers)

I believe we need a constitutional amendment that restricts service in Congress to no more than 12 years. (The founding fathers would be appalled by the folks we have serving 30 and 40 years, they never intended to create a professional politician class)

I believe we need a constitutional amendment that restricts congressmen from running for any other office while they are a Senator or Representative. (It's shameful the number of votes Clinton, Obama, McCain and others have missed this year running for the Presidency, it shows where their real priorities are and its not with the people that elected them)

I believe we further need a constitutional amendment that prohibits the employment of close family by all three branches. They could of course be employed by someone else, but having them employed by their relative is a conflict of interest.(There are numerous instances of employing unqualified relatives in the Legislature branch, but it can also be abused by the Executive and Judicial branches)

Furthermore it would be good to have a constitutional amendment that would limit a former member of Congress from being employed in the lobbying industry for at least 12 years after their last term has been completed. (With the above this ensures that no sitting member of congress was also sitting at the time they served thus avoiding any conflicts of interest.)

Basically all that rolled into one Amendment would go a long way to reigning in the Congress. One or two of those have been tried before but not all of them.

In further Election Reform Amendment I'd like to see a provision whereby you cannot spend more than you can earn during the term you are seeking in obtaining that office. (Yeah I know this one really is a pipe dream, they'll never agree to this, but it would eliminate a large amount of the corruption)

Another thing we need is a Balanced Budget Amendment. It too has been tried but was shelfed . (Currently a 10% cut across the board would balance the budget and yes I realize that would be painful for some programs, however we have to realize we can't keep spending money we don't have).