From the NYT: Inside the Countrywide Lending Spree

by Alex Stenback on August 27, 2007

Any consumer with a functioning BS detector who has seen (over, and over, and over again) number one mortgage lender Countrywide’s televised ads – you know the ones, with a smarmy, guy next door spokesmodel, pitching everything from option ARMS to debt-consolidation Home Equity Loans – probably recognized that there was more at work there than simple "we’re here to help" salesmanship.

Case in point, this piece from Sunday’s New York Times, on Countrywide’s unseemly sales practices, which exposes a corporate culture built around separating its customers from as much of their money as possible:

“I want to be sure you are getting the best loan possible,” the sales representatives would say.

But providing “the best loan possible” to customers wasn’t always the bank’s main goal, say some former employees.  Instead, potential borrowers were often led to high-cost and sometimes unfavorable loans …Countrywide’s entire operation, from its computer system to its
incentive pay structure and financing arrangements, is intended to
wring maximum profits out of the mortgage lending boom no matter what
it costs borrowers…

Now, without begrudging any organization fair profit from its toils (I think we are all adult enough to comprehend that the mortgage business, or any other, is not a public charity,) Countrywide does appear to have set up an organization devoted to deliberately, systematically, and professionally screwing its customers, rather than providing a fair exchange of goods and services.  Borrowing from their Slogan:  Nobody Can do What Countrywide Can.
Inside the Countrywide Lending Spree [NYT]
Photo: Bloomberg

{ 2 comments… read them below or add one }

J.P. Prussack September 6, 2007 at 3:00 am

Countrywide has always offered a wide range of loan products for all types of borrowers, but I think the New York Times may be sensationalizing the story. Big company takes advantage of innocent consumers. Consumers sign between 50 and 100 documents when they take out first or second mortgages against their homes…Consumers even get a 3-day right of recession that allows them to change their mind within three days of signing loan documents. I’m sure Countrywide made mistakes and I’m sure there were deceptive sales tactics used by a small minority of a very respectable company. Taking down this giant will demolish the mortgage industry for the near future. Everyone has a right to their opinion, but before jumping on the Chuck Schumer band wagon, consider for a minute that maybe financial institutes on Wall Street that have been buying up these subprime mortgage companies over the last few years had a plan. Home values have plummeted across the country, foreclosures are rampant and Countrywide is not the villain. No I do not work for Countrywide but as a homeowner with a low fixed rate home loan from countrywide I can tell you that their service is first class and no one shoved a negative amortization loan down my throat.

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