American Banker Calls Out Countrywide Home Loans

Article from October 1, 2007 American Banker 

Subject:  Wells, Countrywide Said Not Modifying” Wells Fargo and Co. and Countrywide Financial Corp. have “played a critical role in the rise of foreclosures,” the National Training and Information  Center, a Chicago community group, said last week.George Goehl, the center’s executive director, said he has been in discussions with both lenders about adopting a two year moratorium on resets for adjustable-rate mortgages that are scheduled to begin resetting this month.  ”Nobody is jumping up and down about the idea of what we’re asking for,” Mr. Goehl said.  ”They just tell us that borrowers aren’t responding.”Neither company responded to requests for comment.

Mark Seifert, the executive director of Empowering and Strenghthening Ohio’s People, a Cleveland group that works with the center, said Countrywide and Wells “are just paying lip service” to the concept of workouts.Countrywide announced last week that it had provided “homeownership preservation assistance to 35,000 loans this year, including 17,000 loan modifications, but Mr. Seifert called that figure, “a drop in the bucket, considering they have a total of 9 million loans.”  (Last month Countrywide said it was servicing 8.96 million loans worth $1.45 trillion as of Aug 31.)Of 132 Cleveland homeowners who worked with the Ohio group to modify loans with Countrywide, 15 got their loans changed, but only two got “good loan modifications” in which the interest and principal were reduced, he said. The other 13 “will be back in our offices in a few months,” because they received only temporary changes in terms.By Kate Berry