Tucson By Choice!

Countrywide Still Has Power to Move Markets

Here's a short list to put a smile on your face.  Stock markets worldwide rallied on news from Countrywide Financial that the worst is over for them in the subprime mortgage crisis.  Search "Countrywide" on Bloomberg this morning, and the results will touch every corner of the globe.

Among the markets that are up on the news:

  • Asia
  • Japan
  • Australia
  • South Korea
  • Taiwan
  • US futures

Add to that the news that the the risk of buying corporate debt is down in anticipation of the Federal Reserve's Halloween pajama party, and this just might be a good week for those Real Estate agents and loan officers who are hitting the bricks.  Go do some business!  Rates are LOW!

And that's the real estate opinion of this Tucson, Arizona mortgage lender!

Mike in Tucson

Mike Jones (Tucson Mortgage Company, LLC): Loan Officer in Tucson, Pima County, Arizona

22 comments • Mike Jones • October 29 2007 10:51AM

Countrywide Financial: Where is the Other Shoe?

More on liquidity (or lack thereof) in the world's credit markets:  Aegis Mortgage Corp. filed for bankruptcy in the US, and Countrywide's stock closed today at $26.61, a loss of nearly 4.5% in a day.  In aftermarket trading, it continues to fall. 

On the other side of our interactive globe, the fallout from tightening liquidity has negatively affected Australia's RAMs Home Loan Group, a mortgage lender with the bad timing and worse luck to have been listed on the Australian Stock Exchange for the first time on July 27th.  Its stock fell 27% today, and 49% since it was listed.  Consider that it has no investments in the American subprime markets, and that its entire portfolio (about $12 billion US in loans) has 100% mortgage insurance.  Why are investors running scared of financial stocks?  When uncertainty exists, as it does in the credit markets right now, it's human nature to retreat with the rest of the herd.  As the retreat slows, though, the rear guard may turn again.  Countrywide's stock may begin to firm up, and  by tomorrow's opening bell, be perceived as a bargain.

When I was developing real estate in a previous life, I had as an attorney a holocaust survivor who could not tolerate indecision.  Julius Robinson would point his finger in the air and thunder: "Possibilities are endless.  Probabilities are a much smaller set [of numbers.]  Make a decision and get moving!"

8 comments • Mike Jones • August 13 2007 10:39PM

COUNTRYWIDE: SCARE 'EM TO THE TABLE!

A survey out this morning says that Mortgage Brokers (and loan officers) are avoiding subprime loan originations.  That's too bad, because the need will not dry up and blow away, even if the product is in short supply. 

What the subprime mess needs is Originators who look out more for the interest of the Client than for their own back pocket. 

It's called ethics.  If your parents taught it to you, you don't have to ask yourself the question "Gee, is this ethical?" 

Countrywide's stock fell to a 52 week low this past week.  A client this morning came in holding a solicitation from CW to refinance his Pay Option Adjustable Rate Mortgage.  There's an $11,000 hard prepayment penalty which will evaporate in just a few months if he doesn't refinance or sell before then.  But the mail piece scared him into thinking that maybe he should do just that. 

Countrywide won't forgive the pre-payment penalty (PPP), and I don't think they should forgive it.  The borrower has a contract, after all.  It's called a mortgage.  The bank made promises, and so did its borrower. 

But the solicitation spelled out potential doom in the form of a worst case scenario that can NEVER happen, given the time frame of his PPP.  The solicitation seems specifically designed to scare the client into refinancing the entire loan AND the prepayment penalty. 

We ran the numbers.  He calmed down, and no--he won't refinance.  It's not in his best interest. 

I have an idea why Countrywide took a charge of $417 million for last quarter... 

And that's the real estate opinion of this Tucson, Arizona mortgage lender,

Mike in Tucson

Mike Jones (Tucson Mortgage Company, LLC): Loan Officer in Tucson, Pima County, Arizona

0 comments • Mike Jones • July 25 2007 09:07PM