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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: estatemakr who wrote (8498)	12/4/2007 4:44:22 PM
From: The Ox	Read Replies (1) \| Respond to of 33421

"...Lending institutions didn't lie ..." Yes, in most cases they probably didn't lie but they didn't exactly tell the whole truth. Glossed over the negatives, maybe? Why explain the finer points when you are about to make a bunch of money on a scam? Highlight the "teaser rate" implications and dismiss the "rate reset" details as not that important. "They WERE told!" They were also "told" that they would be able to refi before the reset occurred. They were also "told" that the equity in their homes was greater then the prices they were paying. I'm sure they were "told" not to worry. I'm sure we are kicking around much of the same common ground but we're looking at it from slightly different perspectives.

To: estatemakr who wrote (8498)	12/4/2007 5:14:17 PM
From: The Ox	Read Replies (2) \| Respond to of 33421

Hi estatemakr, I wanted to respond to the other portions of your post in a separate entry, as I think it deserves a different approach. I'm not for bailing out anyone, in general, but I am for trying to help people out of a difficult situation, one that was not entirely of their own making. People seem to think that helping someone out is bad for business. I couldn't disagree more! While the profit margins on some of these "helpful" new mortgages would be substantially lower then the ARMs they are replacing, in the end the combination of a new mortgage and an (eventually) stronger customer/consumer could end up being a win/win situation. The creative financing that became the rage of the mortgage industry the past few years is not the way the industry has operated in the past. Night and day differences. The industry must take responsibility for it's actions, which is why I think that reseting some of the mortgages is a necessary action by the industry. The industry needs to step up, not the federal government, imo. However, the federal government needs to put pressure on those who resist, as well as assist those who are actively trying to make the bad situation better. I find it some what remarkable that you jump from the possibility of helping out people with underwater mortgages and some how equate this with bailing out someone who invested in a stock or market index that falls 50%. In no way am I advocating socialist treatments or policies. While this may be the manor in which our government chooses to deal with this situation, I feel it is the wrong approach.

To: estatemakr who wrote (8498)	1/14/2008 10:06:50 AM
From: Pogeu Mahone	Respond to of 33421

ROFLMAO "Lending institutions didn't lie" Do you think they lie today, one month after you mader this statement?

To: estatemakr who wrote (8498)	1/14/2008 10:54:42 AM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 33421

"Lending institutions didn't lie" What did they do? Countrywide Draws Ire of Judges Questions About Practices Arise in Bankruptcy Cases; Possible Liabilities for BofA By AMIR EFRATI and KARA SCANNELL January 14, 2008; Page A3 More federal bankruptcy judges are calling into question the business practices of Countrywide Financial Corp., as Bank of America Corp. prepares to buy the ailing mortgage lender. According to court documents in a bankruptcy case in Houston, Countrywide didn't properly credit a borrower's payments made during bankruptcy but instead applied them to prebankruptcy debt, which isn't allowed. In the same case, involving a debtor named William Allen Parsley, Countrywide represented to the court that Mr. Parsley owed fees that turned out to be unsubstantiated and in error. These included an improper $450 fee and a $65 unsubstantiated fee. During a hearing last month, U.S. Bankruptcy Judge Jeff Bohm chastised Countrywide and its lawyers after the company admitted making numerous errors in the case. "How many times do I have to listen to that before I conclude, 'You know, there's got to be some kind of reckoning' when I keep hearing time after time, 'we made a mistake, we made a mistake, we made a mistake, we made a mistake?'" Judge Bohm said. He is considering sanctions against the company. Countrywide says it has incurred at least $400,000 in costs associated with the case after having its employees deposed by the U.S. Trustee Program, a division of the Justice Department that oversees the bankruptcy system. The agency has been investigating the company's handling of loan payments and court claims in cases across the country. In Miami, Bankruptcy Judge A. Jay Cristol last month approved a U.S. trustee's requests to subpoena and depose Countrywide to obtain information about how it made mistakes in a case. Initially, the company claimed in court that the borrower would need to pay $4,800 a month for a mortgage during bankruptcy. But after the borrower objected, Countrywide said it had erred and reduced its claim to about $2,400 a month. In a hearing in December, Judge Cristol said Countrywide had been found "with its hand in the cookie jar." Countrywide has said it was investigating what happened in the case. Bankruptcy litigation is among a list of potential legal liabilities Bank of America may inherit from the company if the planned acquisition, announced last week, is completed. These include inquiries from the Securities and Exchange Commission and several state attorneys general, as well as shareholder lawsuits tied to Countrywide's financial decline and other class-action and individual suits brought by borrowers for alleged abuses by the company. In some cases Countrywide has denied allegations and in some it hasn't yet answered allegations; in others it has said it is cooperating with authorities. Last week, Bank of America's chief executive, Kenneth D. Lewis, said his company had taken into consideration lawsuits and "the negative publicity that Countrywide had" in concluding that ultimately the purchase would be a good deal for shareholders. A Bank of America spokesman said yesterday the company "evaluated current and potential claims against Countrywide and that's reflected in the purchase price we agreed to pay." A Countrywide spokesman didn't respond yesterday to requests for comment. Katherine Porter, a bankruptcy-law professor at the University of Iowa who published an influential study on problems with claims made by mortgage companies in the bankruptcy system, said yesterday that Bank of America "needs to help Countrywide rebuild its technology" to overcome its "structural shortcomings," especially "now that judges are starting to lose confidence" in filings made by mortgage companies. In the SEC inquiry, one area under scrutiny is whether the mortgage lender set aside the appropriate amount of reserves to cover potential losses from loans still held on the company's books, known as loan-loss reserves. Among the areas of interest to the SEC is whether Countrywide adequately increased its loan-loss reserves to reflect slowing or delayed payments from homeowners or if the mortgage lender failed to increase the reserve to purposefully forestall taking a charge to its financial statements. The SEC is also investigating stock sales made by Countrywide founder Angelo Mozilo made through prearranged sales plans. Countrywide on Friday said its policy is to fully cooperate with inquiries from regulators, and that "we believe we have fully complied with all rules and regulations." Write to Amir Efrati at amir.efrati@wsj.com and Kara Scannell at kara.scannell@wsj.com