BluefoxToday blog : Countrywide and NACA are now dating

Countrywide and NACA are now dating

The country's largest mortgage lender has received plenty of bad press lately, most of it the result of questionable business practices. Its subprime loans are defaulting in record numbers, it has well-documented liquidity problems and then it appears to be stonewalling in helping borrowers facing foreclosure. It isn't fun being the target of that kind attention.

In the past week or so it has abruptly changed course and is clearly trying to polish its tarnished image. Just earlier this week it announced that it'd orchestrate comprehensive workouts for ARM borrowers, including refinances, rate reductions and loan restructurings. In essence, the whole package of mortgage mitigation.

And it's going another step further. It'll be partners with NACA, or Neighborhood Assistance Corporation of America, an advocacy organization that has been pestering Countrywide for years about its mortgage practices. Somehow they are now best of friends and having cozy lunches in corner tables.

The former foes just announced a foreclosure prevention program that'll get results, they promise. The two evidently are serious about assisting distressed homeowners, prime and subprime customers alike. How the initiative works is that borrowers who desire a loan workout will have to pass NACA's semi-tough approval regimen. It consists of an application, a buyer's workshop and then a one-on-one counseling session where realistic budgets are prepared.

The process is not interested in debt-to-income or loan-to-value ratios, rather it concentrates only on incomes and expenses and what the homeowners can afford to pay. After that the loan's balance or the interest rate is carefully adjusted to fit within the established limits. There is a 6-month trial phase and if the homeowners make timely payments, the workout becomes permanent.

Hopefully the program works out for everybody.

_______________________________________________________________________________

Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comment balloon 34 commentsEsko Kiuru • October 26 2007 10:53PM

Comments

That sounds interesting. you say it will be like NACA's standards, does that mean only borrowers with really high 10% plus loan rates will be able to qualify?

 Or will someone in default, who had a regular conforming loan be able to work something out to reinstate their loan with Countrywide more easily? 

 What happes if the borrower can't make it during the 6 month trial period?

 

 

 

Posted by Alan Barker (Boomerang Leads) almost 11 years ago

Alan,

If you click on the link, there are more details on the arrangement.

Posted by Esko Kiuru almost 11 years ago
I am currently in the NACA program and it is a great program. It provides an opportunity for homeownership to many who would otherwise remain lifetime renters. The mission of fighting predatory lending is also there main goal. A consumer who has been trapped by a "loan shark" and will inevitable be crushed by an unrelenting A.R.M that should have been illegal in the first place can work with the NACA program and may be saved. NACA is a non profit organization and relies on monies set asside by large banks to fund the loans.  NACA works with banks such as the one you mentioned. Only after the agree to set money aside to fund these loans. Many of these banks have previously participated in questionable loan practices have seen the error of there ways and now are doing the right thing. I applaud the NACA program and the good works they provide. I have and will continue to recommend the program to many of my clients and friends. It is a tough program to work through. It has many rules and regulations and many will not qualify. For those that do qualify and work through the program they are rewarded with an exceptional mortgage product with a payment they can afford to pay.
Posted by Dwight ................ (Home Finder Realty) almost 11 years ago

Dwight,

Thanks for bringing AR members more insight into how NACA works.

Posted by Esko Kiuru almost 11 years ago
Wow, that is interesting stuff!  Do you feel that it's timely enough and they will be aggressive enough to really make a big difference?  I know that if they are able to help one person, it's worth the effort, but do you think it will make a sizable dent in the foreclosure numbers?  I also know that Countrywide originated 1 of evey 6 loans across the nation (that's the number I heard), so whatever they do will help.  I just feel they waited a long time to help.  On top of that, I've been working short sales successfully for a while now and in the last couple months, Countrywide has seemd to tighten down on their short sales.  I know also, that has to do with BPO agent valuations, but the logic behind not accepting an offers on short sales eludes me.  For example, I had a short sale where fair market was truly around $450k.  The BPO came in at $473k.  I had an offer at $401k.  I had the property on the market at $450 for 30 days and dropped to $425 for the last 30 days.  The best offer I got was $401k.  What makes them believe they will net more by taking it back as an REO?  Anyway, I got off onto a tangent, but I guess I don't truly believe they are working with the consumer's best interest in mind.  I think they are trying to subdue the negative publicity they are receiving.  I always try to be positive, but that's what I see.  If I'm out of line, please let me know.
Posted by Lowell Caro Jr., REO Broker and Market Advisor (Keller Williams) almost 11 years ago

Lowell,

Countrywide has been slow in workouts, but due to a lot pressure from many directions is finally getting with the program.

Posted by Esko Kiuru almost 11 years ago
Country Wide has been on the NACA website for a long time now and it was not good press for them. In fact if you read the NACA participation program as a borrower you volunteer to assist in a few protest events a year. Maybe this had some bearing on the CW decision.
Posted by Keith Perry, REALTOR - West Metro Atlanta (Coldwell Banker) almost 11 years ago
If that starts working will that start reducing the great investments in foreclosure homes?
Posted by Ethan Dozeman, Real Estate in Grand Rapids (Realty Executives Platinum Group) almost 11 years ago

Keith & Robin,

CW has obviously changed course to everyone's benefit in helping out borrowers in distress.

Posted by Esko Kiuru almost 11 years ago

Ethan,

Probably to some degree.

Posted by Esko Kiuru almost 11 years ago

Quicker workouts (loan modication) is not going to happy.  It is in the banks best interest to provide painfully slow remedies, all the while the interest-meter keeps running, one day, $30-$150 bucks at a time.  On a small scale, no big deal, but multiply that by 50,000 loans..."Can I get an AMEN!?!"

 

Posted by Richard Sweum (1st Security Bank) almost 11 years ago

Rich,

They certainly have weighed different scenarios and that could be one they like to use.

Posted by Esko Kiuru almost 11 years ago

I am planning a NACA process blog in VivaReal.com in a matter of 60 to 90 days with specific details about how to manage your NACA clients so that they get qualified and through the process with fewer problems.

So for now Join NACA Insight Group and when I compile the various topics about the process in May/June 2008, I'll send you an invitation.

Click Here to Stay In Touch with Eliud Gautier

Posted by Eliud Gautier, Branch Manager (Acre Mortgage & Financial, LLC) over 10 years ago

Eliud,

That's great to put something like that together. Keep me posted.

Posted by Esko Kiuru over 10 years ago

Eliud,

That'll work.

Posted by Esko Kiuru almost 10 years ago

Eliud,

Yes, VivaReal.us is still in development (it always will be) and our core concentration has been on getting listings to the site. The blogging platform in Spanish is up and running, but it does not have all the bells and whistles of AR, but we will be making improvements in the fourth quarter. Last month we generated over 300 home buyer leads in Spanish so it is in full effect.

Since your training for NACA is in English, I believe that AR is better place for it. I will keep you abreast of further developments on our end.

Mucha suerte!

 

Posted by Brian Requarth (VivaReal) almost 10 years ago

Vey intersting story, Esko. It'll be worth keeping an eye on to see how this scenario evolves in the days to come. Perhaps a troubled lender is seeking redemption ? Has Mr.Mozillo left the confessional ?....:-) 

Posted by David Saks almost 10 years ago

I feel it's only right for CW to do this, since they were a major part of the problem.  I'm just getting familiar with NACA and from what I've seen so far, I'm really impressed.

Posted by Jerry Becker, Littleton, Colorado (Jerry Becker and Associates) almost 10 years ago

NACA is a great program. I am attending a class in October on the process of quialifying buyers. I have only been on the listing side. I had my reservations. I made phone calls inquiring about the program and how qualified the buyers are. It went through smoothly.

Posted by Rick Glogowski, Committed to Your Real Estate Needs (Keller Williams Buffalo Northtowns) almost 10 years ago

David,

Now that CW is in the ropes, it's trying make nice.

Posted by Esko Kiuru almost 10 years ago

Jerry,

This improved relationship is to everyone's benefit.

Posted by Esko Kiuru almost 10 years ago

Rick,

Excellent. Everybody likes to see it succeed.

Posted by Esko Kiuru almost 10 years ago

Brian,

Good to see that you're moving right along.

Posted by Esko Kiuru almost 10 years ago

Yeah, its exciting. If you haven't already, you should check it out and create your profile page here. It's free and we are growing at a steady pace and will be launching a multi-pronged marketing strategy leveraging the power of SEO, Online PR and affiliate marketing.

Posted by Brian Requarth (VivaReal) almost 10 years ago

Brian,

I'll take a look.

Posted by Esko Kiuru almost 10 years ago

The "Idea" of NACA is a great one, but it's people DEFINITELY fall short.  As for NACA hating outside agents, it it COMPLETELY true.  I had so much hope in NACA.  Finally, a housing organization with their heart in the right place.  I have worked very hard, attended NACA classes and seminars, read everything, currently have 27 people registered and keep in close contact with most all of them only to have cheap, opportunistic, greedy NACA agents try to steal my clients!  It is ridiculous!  NACA nationwide may be a wonderful organization but the people who represent it in Atlanta are lazy, rude, greedy, immoral and just plain out liars.

I really admired Bruce Marks and everything he has accomplished through NACA.  I hope that if he genuinely believes in what his proposed "NACA" is supposed to be.  Otherwise, the folks representing him in Atlanta make him look like a CROOK!

I hope you have a better team in your parts.

MAKE SURE YOU HAVE A BUYER BROKERAGE IN PLACE!  THEY WILL STEAL YOUR CLIENTS!

Posted by naca over 9 years ago

Wow, that is a lot to take in but I have to say the team in Philadelphia is getting its act together. My recommendation is for you to make sure your client is ready for NACA before you recommend them to NACA.

Have them check their credit online - www.AnnualCreditReport.com or find yourself a local credit counseling organization willing to work with your clients. Remember, even though the interest rate is not credit driven - credit history is still important.

Have your clients collect all the documents ahead of time - bank statements; pay stubs; work history; rental history; contact information for landlord(s) and employer(s); and prepare the monthly budget. And once your client - because remember - they are your clients - and you have an obligation to assure your potential sellers that YOUR client qualifies for a loan - then you register them to the NACA website.

Since you have attended the workshops you ought to know exactly what your clients need for the NACA loans.

As far as them stealing your clients - you have a legal right - if your clients have signed the "exclusive buyer's agreement" and if you were the one to register them on NACA website to report the other agent your local board of realtors and also demand your commission from the other real estate office. But that is a whole different matter.

Eliud Gautier

Posted by Eliud Gautier, Branch Manager (Acre Mortgage & Financial, LLC) over 9 years ago

naca,

That's unfortunate that your experience has been less than satisfactory.

Posted by Esko Kiuru over 9 years ago

Eliud,

Thanks for bringing in more depth to the discussion.

Posted by Esko Kiuru over 9 years ago

Esko,

My pleasure - I appreciate you letting me comment on your site - the last time I did this I got my head chewed off by the blogger in charge. I am glad I could help out.

Posted by Eliud Gautier, Branch Manager (Acre Mortgage & Financial, LLC) over 9 years ago

Eliud,

Any time. The more diverse discussion the better.

Posted by Esko Kiuru over 9 years ago

I recently did a loan signing for Country Wide/ Land America... I was told they had merged. What does this mean if Land America is filling chapter 11? Is Country Wide filing too?Bird

Posted by Mobile Austin Notary, www.mobileaustinnotary.com (Apostille/Authentication/Embassy Legalization, Notary Public, Loan Signing Agent & Process Server Services) over 9 years ago

Jenette,

Countrywide is now part of Bank of America, so it should be okay. Haven't heard of LandAmerica filing for any chapters.

Posted by Esko Kiuru over 9 years ago

I heard the same thing yesterday morning - about LandAmerica - since they were one of the largest supporters of National Association of Hispanic Real Estate Professionals.

 

Posted by Eliud Gautier, Branch Manager (Acre Mortgage & Financial, LLC) over 9 years ago

Participate