Smart Borrower Blog

If you have a loan with Countrywide…


Aug 16th, 2007 @ 4:01 PM by MortgageMentor


With all of the news coverage surrounding the uncertainty of Countrywide Home Loans’ future I have received a lot of panicked calls from home owners worried about their loans with the gigantic mortgage lender.  Many homeowners are asking if their loan can be called due, and who to make their mortgage payment to in case of a collapse by the company.

If anything happens to Countrywide (and that is still a pretty large if) you will not have your loan called due; and you should continue making your mortgage payment to Countrywide just as you have been every month.

Your loan is in most cases not owned by Countrywide.  In the mortgage industry the company who “services” your loan (i.e. the company that sends you the monthly bill and collects and processes your payments) is different from the company who owns your loan.

Countrywide retains the servicing on many loans that they end up selling to investors (such as hedge funds, foreign countries, Wall Street firms, etc.) in the form of Mortgage Backed Securities.  So while they continue to handle the payment processing your loan is actually owned by someone else.

If you are a homeowner currently in the process of refinancing with Countrywide or are purchasing a new home with financing from Countrywide, you should definitely check with your mortgage professional to ensure that your loan is still eligible for funding under their newly-revised guidelines.  Many existing loans that were submitted prior to the guideline changes are now ineligible based on recent market changes.

Remember, if you are a mortgage holder do not panic; keep on making your payments as normal.  If you are in the process of obtaining financing with Countrywide (or any lender for that matter) it is our advice to contact your mortgage professional straight-away to ascertain the status of your loan.

6 Responses to “If you have a loan with Countrywide…”

  1. Colin says:

    There’s a good chance that many stated loans have been sent back into underwriting at Countrywide.

    They will likely be re-underwritten as full-documentation loans, meaning two years of verifiable income will be needed to continue funding the loan.

    This will spell trouble for a large number of borrowers looking to get financing, as many will fall short income wise.

  2. Faiz says:

    Hi, I wanted to call your attention to this post we did on Countrywide and the fact that it’s still running advertising. It’s worthy of a debate I think, but we take the position that they should focus their resources on securing the loans.

    http://thinkprogress.org/2007/08/16/countrywide-running-ads/

    Leading Home Mortgage Loan Company On The Verge Of Bankruptcy Still Running Ads

  3. Colin says:

    First off, Countrywide is not going bankrupt. And secondly, if they, mortgage payments will continue to be collected as the company works under bankruptcy protection.

  4. Janice says:

    Hi All –

    Apparently Countrywide is under investigation for misleading and falsely advertising its rates and programs to customers and if you recently purchased a loan, you should check out the following link; http://www.hbsslaw.com/investigation_Countrywide.htm

    There have been several reports lately that indicate aggressive sales and telemarketing tactics were used to get people to buy high-rate loans, when they didn’t even qualify.

    The company’s interest is apparently solely focused on its bottom line and not your financial well being.

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