Will B of A’s purchase of Countrywide affect Half Moon Bay real estate market?

Rates have taken center stage in the real estate buying and selling process for the last 6 months…and I don’t think it’s going to end any time soon.  A complex issue such as this that involves several facets of the financial markets will certainly take some time to sort out – all while there are folks out there who need to be buying and selling their properties.

Countrywide was the darling of home purchase lending in the early 2000’s.  I know many people who have used Countrywide.  Unfortunately their business plan did not allow for a timely market correction.  If anyone should have been watching the markets from the investor perspective it would be Countrywide’s execs; otherwise they wouldn’t be in this mess.  When the market shifts new opportunities are created…

“There are near-term challenges, but where there are challenges, there are always opportunities,” Lewis said during a conference call today. “We view this as a one-time opportunity.”

It seemed likely a buyout would happen when Bank of America loaned Countrywide $2 Billion a few months ago.  Now that it has happened, will it change the face of local real estate?

The positive is that changes are happening in the lending industry to stabilize things – and that is a very good and much needed process to happen – quickly!  Is there a negative to this move for consumers?  I guess I would be reading my mail much more carefully if I had a Countrywide loan.  On a more micro level, it probably won’t change much because we have always had B of A products available through our local reps, such as Bob Zimmer of Bank of America and through Mortgage Broker, Susan O’Driscoll of Princeton Capital.  But B of A’s primary business is not mortgage lending, it is banking.  Are they continuing to move the chess pieces toward an entire business model shift?  How will this affect another solid giant, Wells Fargo?  Ask Bill Griffis, our local WF rep yourself…

The specifics that HAVE changed here – and elsewere – is lending criteria.  “…Mortgages to people with weak credit contributed to a surge in defaults last year…”  also from the Bloomberg.com article.  More on CREDIT in my current Hot Topic article.

For consumers about to talk with a Mortgage Broker or direct lender:

  • Know how long you plan to be in the property you are purchasing
  • Have at least a quick idea of your credit scenario before meeting with a lending professional
  • Do NOT be afraid to ask questions and get a satisfactory answer
  • It’s okay to talk with more than one mortgage professional and interview until you feel comfortable
  • Know that there are good loan products out there and people are still buying and selling homes