Foreclosure Crisis: Agitation in Mortgage Industry

November 29th, 2007

With foreclosures on the rise and millions being affected the victims are no longer willing to take it lying down. House owners staged agitations in front of the offices of Countrywide Financial vociferously demanding that the mortgage king take positive steps to check foreclosures. The afternoon rally was organized by Mabuhay Alliance.

Greenlining Institute and Mexican American Political Association staged a demonstration consisting of about 60 people in Santa Ana, situated approximately 35 miles south of Los Angeles. The story does not end there – more are in the offing during the forthcoming weeks.

The organizers want Countrywide to halt the foreclosure proceedings against defaulters as well as modify the rising interest rates on mortgage loans that are about to reset. They also demanded the company executives to donate funds from their bonus kitties for the borrowers who are at risk.

Nativo Lopez, the president of the Mexican American Political Association pointed accusing fingers at the system itself, saying that knowing fully well the implications of the game they were laying flat the borrowers despite the fact that the entire market was tumbling and falling.

Countrywide announced on Tuesday that 750 of its Orange County customers would lose their houses by the end of this year. Across the state 16,00 would be affected during this period.

Rattled by the turn of events – economic, political and social coupled with direct agitation Countrywide’s tone is soft. In a statement it said that ‘Countrywide is ready, willing and able to help borrowers facing financial distress.’ It also added that many effective programmes are ready to be launched to help the victims ‘who have the willingness and wherewithal to remain in their homes’. In the previous month Countrywide declared that it would refinance and modify loans to the tune of $16 billion ready to reset by the end of 2008. Officials are trying to find solutions to payment plans involving 80,000 loans.

Already 55,000 have benefited and been able to avoid foreclosures in this current year. All this has led to the company posting a loss of $ 1.2 billion during the third quarter. In 25 years this has been its first quarterly loss.

It is expected that if the mortgage industry wants to survive then it must bend a little so as to not to break. But why were there no checks and balances when the sub-prime market reigned supreme?