No Love to be Found at Countrywide (Except Mozilo’s Love)

by Florida's #1 Mortgage Planner on November 23, 2007

Countrywide’s troubles continue and in my recent post talking about their stockCountrywide Picketing tanking on liquidity concerns, I mentioned that Mozilo (or other lackey) would try to persuade people to believe their are no issues, which is exactly what happened.  Now, people are even taking up picketing outside Countrywide, at least in San Diego.

Now, I have to go against the picketers on this one though.  Why?  They are picketing to get Countrywide to stop foreclosing on people.  While some may have been deceived for real, as the picketers argued, many probably deserve what is coming to them.

Now, there are definitely issues at Countrywide, probably even some related to the "steering" accusations, but to demand CW to bailout basically everyone is ludicrous.  They asked that Countrywide, and others, extend the low introductory rates on their mortgages as if that will truly help.  The Governator had signed something similar this week.

Will "freezing" mortgage rates help?  According to Mish’s Global Economic Analysis, the answering is no.  Here is a very truthful analysis taken from his sight:

"For starters the very best thing that could happen to most of those stuck in mortgages they cannot afford would be to lose their home. The American nightmare is not losing one’s home but rather being a debt slave on one’s house, owing more on it than it is worth for an eternity.

Where are all the affordable housing advocates anyway? The more foreclosures there are, the more affordable housing will become. Those who really want affordable housing should be cheering asset deflation."

The truth of the matter is that most of the homeowners facing foreclosure had no business buying those homes in the first place.  So, as I have said before, help the few deserving ones, but let the rest go through foreclosure so they can learn from their mistakes (hopefully) and move on. 

The entire mortgage and housing market needs the cycle to keep moving, not get stuck in a bureaucratic red tape parade that can only allows politicians to "steal lollipops while kissing babies" (line taken from a movie a while back).

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