Nbadan
07-13-2008, 08:12 PM
While the gov'ment uses taxpayer money to bail-out rich banks and risky mortgage lenders Freddie and Fannie, the small guy gets reamed in the arse...
The silence of the lenders
By Gretchen Morgenson
Published: July 13, 2008
Dan Bailey Jr. was desperate when he sat down on May 19 to send an e-mail message to his mortgage lender, the Countrywide Financial, pleading, yet again, for help.
Behind on his payments and fearful of losing his home of 16 years — a 900-square-foot bungalow in Wilmington, North Carolina — Bailey had spent the previous six months unsuccessfully lobbying Countrywide, at the time the nation's largest home lender and loan servicer.
Bailey, 41, promised in his e-mail message that he would pay every nickel he owed if Countrywide would modify his mortgage in a way that allowed him to keep his home. He sent the message to a grab bag of Countrywide e-mail addresses, which he had received from www.LoanSafe.org, an online forum for borrowers.
Among the recipients of his e-mail was someone he had never heard of before: Angelo Mozilo, Countrywide's co-founder and chief executive. Lo and behold, Mozilo replied — inadvertently, as it turned out.
"This is unbelievable," Mozilo said in his message. "Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the Internet. Disgusting."
Within days, Mozilo's e-mail was widely circulated on the Internet and in the news media, offering a rare instance when candid comments from a powerful CEO entered the public realm. For Bailey, however, the disdain that Mozilo expressed was depressingly familiar.
After all, Bailey had received little else from Countrywide after he began trying to renegotiate an adjustable-rate loan that he could no longer afford. Until then, he says, the only guidance the lender provided was a suggestion from an employee of Countrywide's "home retention team" that he cut back on groceries to pay his mortgage.
"I told her that I probably spend $10 a day on groceries," Bailey recalls. "And she said 'Maybe you can eat less.' "
As record numbers of homeowners try to avoid foreclosure, the responses of big lenders and loan servicers like Countrywide are drawing increased scrutiny. While these companies maintain that they're doing all they can to help imperiled borrowers, critics contend that homeowners routinely meet roadblocks.
Many borrowers have trouble even reaching a workout specialist; others soon find that the modifications they received are as unaffordable as the mortgages they replaced. Some homeowners, eager to sell their homes before the value falls further, say they are impeded by loan servicers' inaction or incompetence.
"We continue to rely on lenders to fix the problems they created by making reckless loans in the first place, but it's clear that foreclosures keep rising," says Deborah Goldstein, executive vice president of the Center for Responsible Lending, a nonprofit group that assists borrowers. "We need federal regulators to step in or court-supervised loan modifications — any solution that might standardize the process better."
With two of the nation's most important mortgage concerns, Fannie Mae and Freddie Mac, continuing to falter last week — raising the possibility that they may need a federal bailout or takeover — foreclosure problems are likely to become even more complex.
Linky (http://www.iht.com/articles/2008/07/13/business/13mail.php)
The silence of the lenders
By Gretchen Morgenson
Published: July 13, 2008
Dan Bailey Jr. was desperate when he sat down on May 19 to send an e-mail message to his mortgage lender, the Countrywide Financial, pleading, yet again, for help.
Behind on his payments and fearful of losing his home of 16 years — a 900-square-foot bungalow in Wilmington, North Carolina — Bailey had spent the previous six months unsuccessfully lobbying Countrywide, at the time the nation's largest home lender and loan servicer.
Bailey, 41, promised in his e-mail message that he would pay every nickel he owed if Countrywide would modify his mortgage in a way that allowed him to keep his home. He sent the message to a grab bag of Countrywide e-mail addresses, which he had received from www.LoanSafe.org, an online forum for borrowers.
Among the recipients of his e-mail was someone he had never heard of before: Angelo Mozilo, Countrywide's co-founder and chief executive. Lo and behold, Mozilo replied — inadvertently, as it turned out.
"This is unbelievable," Mozilo said in his message. "Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the Internet. Disgusting."
Within days, Mozilo's e-mail was widely circulated on the Internet and in the news media, offering a rare instance when candid comments from a powerful CEO entered the public realm. For Bailey, however, the disdain that Mozilo expressed was depressingly familiar.
After all, Bailey had received little else from Countrywide after he began trying to renegotiate an adjustable-rate loan that he could no longer afford. Until then, he says, the only guidance the lender provided was a suggestion from an employee of Countrywide's "home retention team" that he cut back on groceries to pay his mortgage.
"I told her that I probably spend $10 a day on groceries," Bailey recalls. "And she said 'Maybe you can eat less.' "
As record numbers of homeowners try to avoid foreclosure, the responses of big lenders and loan servicers like Countrywide are drawing increased scrutiny. While these companies maintain that they're doing all they can to help imperiled borrowers, critics contend that homeowners routinely meet roadblocks.
Many borrowers have trouble even reaching a workout specialist; others soon find that the modifications they received are as unaffordable as the mortgages they replaced. Some homeowners, eager to sell their homes before the value falls further, say they are impeded by loan servicers' inaction or incompetence.
"We continue to rely on lenders to fix the problems they created by making reckless loans in the first place, but it's clear that foreclosures keep rising," says Deborah Goldstein, executive vice president of the Center for Responsible Lending, a nonprofit group that assists borrowers. "We need federal regulators to step in or court-supervised loan modifications — any solution that might standardize the process better."
With two of the nation's most important mortgage concerns, Fannie Mae and Freddie Mac, continuing to falter last week — raising the possibility that they may need a federal bailout or takeover — foreclosure problems are likely to become even more complex.
Linky (http://www.iht.com/articles/2008/07/13/business/13mail.php)