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Countrywide Mortgage making me nervous

Posted by pharmer25 (My Page) on
Sun, Mar 2, 08 at 15:41

I dont know if this is an appropriate place to ask, or even an appropriate question- as Im not sure there is an answer!

Our mortgage was sold to Countrywide in late 2006. We havent had any problems. We have the same fixed rate, we always pay on time and generally pay extra applied to principle. No issues with billing, payments being credited, etc. We have no escrow (we pay our own property taxes) and pay no PMI.

Im nervous with all this talk lately about their stability has me wondering what will happen to my mortgage!! I know that Countrywide was recently aquired by Bank of America. We still send our payments to Countrywide as billed. Any thoughts on what could happen if this company goes under? Will our mortgage just get sold again, or could something worse happen?

We really arent interested in refinancing with another institution at this point since our fixed rate is at a great rate (in our opinion!) and we have no financial reason to need to refinance. Additionally, even with a refinance there is no guarantee that our mortgage wont change hands again

Any thoughts or experiences welcome! Thank you.


Follow-Up Postings:

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RE: Countrywide Mortgage making me nervous

Hi pharmer,

Im nervous with all this talk lately about their stability has me wondering what will happen to my mortgage!! I know that Countrywide was recently aquired by Bank of America. We still send our payments to Countrywide as billed. Any thoughts on what could happen if this company goes under?

Countrywide can no longer "go under" since they've been consumed by BofA.

BofA *could* theoretically "go under"... but in reality they're a huge depository bank with a very broad cross-hedged business base (which means when one area of the economy weakens, they have a division (or several) that experience offsetting benefits.) In order for BofA to go completely titsup we would have significantly more to be worried about than our mortgages.

STILL... this question could be asked by someone who has a mortgage held & serviced by a weaker company... so I will answer to THAT possibility;

Your mortgage contract is a very valuable asset. It is a time-based cashflow document that is worth the stability of payments (sweetened by your accelerated voluntary surrender of principal, in Pharmer's case,) to the noteholder.

Whenever a company goes bankrupt, other "strong hand" competitors show up to pick the remaining meat (the valuable assets) off of the bones of the old carcass.

Other servicing operations would "bid" to buy the rights to assume the ongoing cashflow stream from your mortgage contract.

Will our mortgage just get sold again, or could something worse happen?

The only "worse thing that could happen" that I can imagine is your Note getting temporarily "stuck in a crack" and thus you stopping the receipt ofmonthly payment coupons/invoices... and when you send off your monthly payments to the last address you are familiar with they are returned "addressee no longer here."

Now, I have never heard of this ever actually occuring... but if it DID, what I would recommend doing is asking your local escrow company (the same one that closed your transaction, probably,) to set up a "mortgage payment escrow account" that you can make your regular monthly payments into, as though you actually still had a counterparty to your mortgage contract as always. In this manner you would have an undeniable papertrail of "good faith payments" made to an arm's length party outside your control.

I'm not sure that this level of diligence would be absolutely necessary... but it certainly could never hurt... *IF* such a freak situation ever happened.

ULTIMATELY, remember that even if the other party temporarily "disappears"... you are STILL bound and legally responsible for perfomring on YOUR side of the contractual obligation (i.e. you are still technically responsible for making the payments on time... even if it seems there is nobody to actually pay.)

SO....
A) I really really wouldn't lose any sleep over this extremely unlikely scenario,
B) If it ever did happen, here (above) is a solid plan to follow.

Luck!
Dave Donhoff
Strategic Equity & Leverage Planner


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RE: Countrywide Mortgage making me nervous

dave_donhoff wrote: "The only "worse thing that could happen" that I can imagine is your Note getting temporarily "stuck in a crack" and thus you stopping the receipt of monthly payment coupons/invoices... and when you send off your monthly payments to the last address you are familiar with they are returned "addressee no longer here.Now, I have never heard of this ever actually occuring... "

I have heard of this occurring. The Nov. 02' issue of Smart Money Mag had a cover story about this.

I don't think pharmer25 has anything to worry about, but I think its useful to know how to deal with something like this if it does come up.

Dave_donhoff, Thanks for commenting. You answered some questions I had too!

A link that might be useful:

SmartMoney magazine (Cover) calls WaMu "THE BANK FROM HELL"
in a Nov. 02 article: "I Can't Believe They Treat People Like This"
www.wamufraud.com/


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RE: Countrywide Mortgage making me nervous

Dave,

Remember our dream house over on the real estate forum & the discussion of adverse possession? That sorrid tale brings to mind a 'possible' scenario for average homeowners that would seem to fit the general profile of your "Plan B". The American Home Mortgage BK has been a nightmare for lots of folks. If I remember correctly, the trustee nabbed escrow payments for creditors & taxes/insurance became delinquent. Eventually, the monies were returned & properly distributed to the various taxing authorities & insurance companies but not before several thousand homeowners had been quite worried.

It's now been over a year & we remain unable to identify the owner of our 'dream house'. There's a Trustee Deed on file covering the foreclosure but that Trustee denies owning the property. The house has been sitting unlocked & unmaintained since Feb. '07. What a tangled web they weave...

/tricia


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RE: Countrywide Mortgage making me nervous

Thank you for your expertise, Dave. It does help me sleep knowing they wont (or cant?) come and ask me to pay off the balance in one shot- which we (and most people!) cannot afford to do.

Hopefully our mortgage doesnt get lost in transition, but we are hopeful for another sell out to another company that doesnt have such a bad name currently. We shall see.

Thank you!


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