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Countrywide: Foreclosures Double

Filed under: Business,Finance,Real Estate — Paddy Wallbouncer @ 12:55 pm 2008 January 9

Now who’s side is Countrywide on? The foreclosure process happens when the borrower of a property has missed a few payments. Depending on the individual state laws, there is a timeframe of weeks or months before the bank can begin foreclosure proceedings. During this time, a foreclosure investor can come in and take over the payments on the property and perhaps even give the original borrower a little cash as s/he walks away. Everybody’s happy.

Now Imagine the same scenario except the value of the property is less than the loan amount. That is the situation we are in today. The pressure is on the bank to take less than what they are owed by either the homeowner or investor in negotiation. What motivation does a bank have for doing that? They have their money tied up in a property that is losing value and has a cost of upkeep. They are happy (well not happy, let’s just say “satisfied”) if they can take a lesser amount of money out of a property and leave the game before they go bankrupt themselves..

Countrywide Financial Corp is the largest mortgage lender in the United States. They control over 9 million mortgages. Out of those loans, the foreclosure rate is now at 1.44%. A year ago it was at 0.70 percent -and it is accelerating, November’s rate was 1.28%. They also measure delinquency rate. This year it is at 7.2% which is up from 4.6% a year earlier. Their share value has dropped over 20%, they’ve lain off over 10,000 employees recently and bankruptcy rumors are in the air.

If you have available cash and you can weather the downturn, there may be foreclosure deals to be had. Even if the government bails out the mortgage industry, (another prevalent rumor) keeping a close eye on the foreclosure market can yield significant gains in the upcoming years. Finding a resource to help you monitor foreclosures is simple with the programs on the internet. Go with one that has a national reach and is well established.

Yes. We know. It’s: “Nationwide is on your side”

Rates and Percentages Source: Reuters

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