Countrywide, a lender known for handing out poor credit mortgages posted a loss of nearly $900 million for the first quarter. While many knew that the news was not going to be good, few expected the losses to be this high. When you compare this loss from the poor credit mortgage lender to their profits from the same period last year, the comparison is quite stark.”One rising concern is that non-purchase loans represent the last gasp of a refinance effort by consumers to pull any remaining equity out of their homes to pay off some higher-interest debt — credit-card bills or auto loans,” said Walter O’Haire, analyst with financial research firm Celent.”However, as the housing market continues to decline and defaults and foreclosures continue to rise the refinance business may be in for a very challenging time in the second quarter,” he added.”Yesterday, at hearings in Los Angeles before the Federal Reserve Bank of San Francisco, Bank of America said that as part of its planned acquisition of Countrywide, the company would look to modify loans for some 265,000 customers, totaling over $40 billion in loans,” said O’Haire. “It makes sense for Bank of America to take steps and not add to Countrywide’s sizable inventory of REO properties.”
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