Blown Mortgage - Latest Comments in BofA to modify 265,000 Countrywide loans

Re: BofA to modify 265,000 Countrywide loans

morganb — Tue, 29 Apr 2008 21:01:03 -0000

I think a follow up article and some outreach to regular blownmortgage
readers who are members of the press is in order tonight!
morgan

Re: BofA to modify 265,000 Countrywide loans

Paul Hiller — Tue, 29 Apr 2008 18:24:40 -0000

Ann is right. When we go down that road there is no end in sight. That is why I was so shocked by what McGee said. The banks just went to all the trouble of killing the cramdowns that congress was proposing. Now B of A opens the door to doing them voluntarily. I am sorry that no one in the press has picked this up and pressed him on it. I expect he will backpedal.

Re: BofA to modify 265,000 Countrywide loans

ann — Tue, 29 Apr 2008 17:15:35 -0000

The question I have is what types of loans are going to be modified? Teaser ARMS? MTA's? Also how do you modify? Based on True income when it was a liar loan? Principal Reductions in a declining market..does that mean that a year from now when the price goes down another 10% are those borrowers going to expect more? What about the average Joe next door, who isn't a "troubled" borrower and now has a principal balance of $300K..while his neighbor had 50K forgiven and now has principal balance of $250K?

Seems to me there is no end in sight...

Re: BofA to modify 265,000 Countrywide loans

morganb — Tue, 29 Apr 2008 11:33:04 -0000

Great find and great point Paul! I wonder if B of A will be elaborating on
any of these options publicly. The first wind of a short refi would indeed
put the finance world on it's head. Thanks for sharing!

Re: BofA to modify 265,000 Countrywide loans

Paul Hiller — Tue, 29 Apr 2008 11:27:59 -0000

"We will continue to work with distressed borrowers to match the customer's repayment ability with the appropriate loss mitigation option, including loan modifications, forbearances, repayment plans, lower rates and principal reductions," McGee said. "

Talk about burying the lead. The money shot here is the words at the end of McGees' sentence. Lower rates and "principal reductions".
This is the first time I have seen a lender quoted using those words. If he is serious this is huge. The problem for nearly all the borrowers in trouble is the size of the debt, not the rate. If B of A gives people a short refi it will be a game changer.