As a sign of the times, the country's largest mortgage lender, Countrywide Financial, was reportedly bought today by Bank of America, making the Charlotte, NC based financial giant now the leading lender. There had been speculation for some time, especially after B 0f A made Countrywide a $2B loan late last summer for a 16% share in the company.
Many believed Countrywide was on the verge of declaring bankruptcy, leading to a list of questions of what would happen then. The $2B loan helped their position temporarily, but when they own 1 out of 5 loans in America, it was just a matter of time. We've seen a list of lenders go out of business in the past 6 months, but the possibility of Countrywide adding to the list made many worry.
With short sales and foreclosures up recently, many lenders are having financial problems because many home sellers are facing financial problems. If you're not familiar with a short sale, I'll explain a bit about them, but feel free to email me with any questions.
A short sale is a situation where the home seller is behind in payments and is facing foreclosure if he doesn't sell or bring the payments current. More importantly, the home is no longer worth what is currently owed on the home. For example, you owe $200,000 but the home is only worth $150,000 in today's market. Ideally, you would want to just wait until the home appreciates enough to sell it and break even or better. But many investors or home owners in financial troubles can no longer afford the homes. The investors thought they could sell the home in plenty of time and make a nice profit. We're seeing a lot of that in the Fort Myers real estate market. The numbers of SWFL homes for sale has risen to record numbers.
It is a great time if you are a buyer though, there are some great deals to be had. Email me if you'd like to know some of the best. I've got to run, I'm actually going to show a couple this afternoon.
See you soon, Jeff
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