Countrywide/BofA Conspire Against a Borrower & Shareholders

homerebound at 22:18 2008-09-05 said:

Mr Mortgage, with all due respect, I do not agree with your outrage in this situation. What you are suggesting is that the bank should take an immediate loss and structure the loan correctly now instead of later. Guess what, they don't have the money to do it! The work-out you described will result in the loss being spead out over five years by interest income loss and likely again at the end of five years when the loan has to ultimately be written down or foreclosed on. Why in the world would the bank write down massive amounts now when they can take an interest loss spread over five years in hopes that the real estate market is recovered and the collateral would be worth more? Hey, it's not just the bank's fault that people are not paying these bills. I'm assuming there was a loan closing that happened at some point and the borrowers agreed to this original loan? I'm sure that in this case the borrower could not rent such a home for the new payment amount and tax benefits of what countrywide has given them. Honestly, stop crying...this is a gift. In five years, yes there will be problems, but at least they have five years to prepare. A lot can happen in five years - just look at what happened in two years.

In terms of the shareholders, I am assuming most of these loans are held in MBS that have already been written down massively. Ahhh., duh? I smell huge income no matter what happens in five years from the banks given the fact that they are already writing down the values of these securities in a massive way. Like you said, it's a matter of survival now and how they will recover in the future.

I do agree with one thing, most people sould not be negotiating modifications themselves. In most cases all that happens is that the bank says: "here is the deal" and the consumer says "ok where do I sign" with no consideration. I've seen people get themselves into mods much worse than what you described. Permalink