Nearly 50 sign-waving demonstrators chanted and marched outside the Countrywide Financial office on Frazee Road yesterday to protest the way the firm has handled soaring foreclosure rates in San Diego County.
Protesters yesterday said Countrywide and other lenders had steered many borrowers into subprime loans when they could have qualified for cheaper, conventional mortgages.
“Be right, be just, be fair,” said Nativo V. Lopez, president of the Mexican American Political Association. “Allow our families to remain in their homes.”
In part, demonstrators yesterday asked Countrywide to stop foreclosures on borrowers who have fallen behind in their mortgage payments. They called on the lending giant to modify adjustable-rate mortgages that are due to reset at higher amounts.
Leaders of the protest also questioned the importance of an agreement with lenders brokered this week by Gov. Arnold Schwarzenegger.
The governor’s plan, in part, calls for Countrywide, GMAC, Litton and HomeEq to allow many distressed borrowers in California to extend the low introductory interest rates on their adjustable loans.
“Is this really a new commitment?” asked Orson Aguilar, associate director of Greenlining.
My Comment: Whether or not this is new program is basically irrelevant, Freezing Mortgage Rates Will Fail.
As they marched along Frazee Road, protesters chanted “Fix our loans, save our homes.” Some of the messages written on signs they carried said, “Got Turkey? Countrywide home loans”; “Keeping my home should not cost me an arm and a leg”; and “Would you give your mom a subprime loan?”
My Comment: Most of those in trouble had no business buying the homes they did in the first place. They have no inherent right to keep them.
“The company has numerous effective programs to assist borrowers who have the willingness and wherewithal to remain in their homes,” the statement said. “Countrywide recently announced the $16 billion home preservation program specifically designed to help those facing a rate reset in the coming year – a program that will help 82,000 borrowers.”
The company said it had provided “home retention solutions” to more than 55,000 borrowers this year.
My comment: OK so Countryside will “possibly save” a grand total of 137,000 homeowners. This is a drop in the bucket out of a total of 2,000,000 or more homeowners who will be foreclosed on.
A recent study from the California Reinvestment Coalition found that loan modifications have been inadequate.
My Comment: Of course they are inadequate. They almost have to be inadequate. Countrywide will be losing money on every one of them. The idea for Countrywide is to minimize its losses, not to bail out homeowners.
In a prepared statement, the advocacy group said it had “surveyed 33 of the state’s more than 80 mortgage counseling agencies that offer assistance to financially strained borrowers, and found that most borrowers are pushed to foreclosure or short sale, leaving them without the homes they worked so hard to own.”
My comment: I am surprised by this. It seems 33 of 80 counseling agencies are actually watching out for the best interests of their clients. If asked to guess, I would have said 10 not 33. However, the number ought to be closer to 70 out of 80. Losing the home and starting over rather than remaining a debt slave forever in a depreciating asset is likely the best solution for the vast majority of those struggling.
Too many misguided souls are trying to do what’s best for the lender, not what’s best for the borrower stuck in a hopeless situation. The longer those people keep struggling, the worse off they will become. Foreclosure and bankruptcy are not the worst options, they are likely the best options.
Mike Shedlock / Mish
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