Why are mortgage lenders continuing to get in trouble
My mortgage is with Countrywide and many of my clients have used Countrywide to finance the purchases of their home. While there has been significant bad press regarding Countrywide and they have been exposed to losses from bad decisions made during the lending process, I thought everyone was cleaning up their "act" a bit these days but a letter I got yesterday seems to indicate that the lenders are continuing their troublesome ways.
I should have known it was junk mail because I do my mortgage payments online and don't get a paper statement in the mail. But it sure looked official on the envelope, with "important mortgage information" boldly splashed on the envelope. I open the envelope to find out that they want to refinance my loan with their "innovative new Fastrack Loan Program for their valuable customers to save them time and eliminate paperwork that keeps them from getting access to cash and better rates fast.
And there is potentially no need to show bank statements or verify other assets... no paycheck stubs or proof of income required... no new appraisal needed (in most cases) ...and no-closing costs options are available."
Well, I've shredded my invitation to take equity out of my house but I can't stop wondering why the lenders haven't learned their lesson and continue to loan money with no documentation after getting so burned by so many borrowers recently. And with tightening underwriting standards making it difficult for even credit worthy borrowers to currently get mortgages, a solicitation like this just seems to be asking for more potential problems.