More crack, please?

December 7, 2007

images-3.jpegYesterday, as most people already know, President Bush announced a program designed to stem the rising rate of foreclosures.

By coincidence, yesterday was also the day that I (well, Mr. Footnoted) received this letter (pdf) from Countrywide (CFC), a company at the heart of the current crisis, offering us a “lower, more affordable monthly mortgage payment than traditional 15 or 30 year loans” by stretching the loan out to 40 years. According to this press release, Countrywide is a big supporter of the President’s Hope Now program and has estimated that as many as 82,000 borrowers could be eligible for assistance.

Given those numbers, it would seem like Countrywide has its work cut out for it. So why is it looking to hook more customers on its refinancing crack? I called the number on the letter this morning to find out and after an initial screen spoke to someone named Melvin, who, despite my best efforts, declined to give me a ballpark on what sort of interest rate Countrywide was offering. Melvin said he couldn’t give me a rate without details on our current equity, income and credit score — information I wasn’t willing to provide. When I played dumb — something I sometimes do for entertainment value when talking to sales folks, especially about financial products — and asked Melvin where I had heard about Countrywide, he said he wasn’t sure. Then I said, “Oh, I’ve read about you in the news. You’re the sub-prime guys.” Melvin’s response: “We don’t really do sub-prime anymore.” Really? Could have something to do with those 82,000 folks in Countrywide’s queue.

One final note about Countrywide. The Florida sex party house that Countrywide owns and which I footnoted last month, has had a price cut: it’s now listed at $890 K down from $904K. The mortgage was for $1.1 million. Start multiplying that a few hundred thousand times and you start to understand just how bad this whole thing really is. Even without Countrywide trying to hook more people on crack.

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