Countrywide Home Loans ceased operating under that name as of 2008 but their irresponsible and illegal lending policies continue to affect the overall economy to this day and will continue to affect it for the foreseeable future. Countrywide refinancing loans were given mainly to people who had poor credit under their subprime mortgage subsidiary, Full Spectrum Lending. Bank of America bought most of their loans and what most experts consider to be toxic assets, including Countrywide Home Loans huge portfolio of subprime and negative amortization loans.
Countrywide refinancing allowed many millions of homeowners around the country to take out all or most of the equity they had built up in their homes over the years. Countrywide loan officers encouraged borrowers to apply for as much as they could then made sure that the appraisals, usually done by their own appraisal company, Landamerica, were high enough to warrant the loan amount.
Countrywide made hundreds of millions of dollars in profit over the years by giving out loans to just about anyone that applied. The old saying in the mortgage industry was that you could get countrywide refinancing if you had a pulse. They targeted mostly older people who were not very savvy on refinancing. They would lure customers by telling them that they were going to get a lot of cash and not to worry since their home would go up in value for many years to come.
One of the worst countrywide refinancing loans was the Pay Option ARM (Adjustable Rate Mortgage), also known as the Negative Amortization Loan. This loan offered a very low starter interest rate, usually around 1% and no more than 3%, and was tied to one of the indexes, either the Cost of Funds Index (COFI) or the Libor, with a huge margin attached to it. Each month the borrower would get a statement with three payment options. If they paid the lowest countrywide refinancing option, they would only be paying a less than interest only payment, causing the deferred interest to accrue on top of the borrowers existing loan amount. After a set number of years, usually five, the loan would recast to a super high monthly payment. This type of loan has led to many thousands upon thousands of foreclosures.
If you are a victim of countrywide refinancing, please contact Bank of America and request a loan modification. The current administration has established several programs to give homeowners relief including TARP (Troubled Asset Relief Program) and HAMP (Home Affordable Mortgage Program). Please see the HUD website for details or call a reputable professional Loan Modification Company.