Ed's Blog

Last week at the California Association of Mortgage Broker’s annual conference in Long Beach, we held a press conference to discuss some troubling news. At the time, it appeared that Countrywide, the nation’s largest mortgage lender was headed for serious trouble. This was sure to have a huge psychological impact on consumers, and I didn’t hesitate to say it:

"The consumer will feel that there is no loan availability if companies like Countrywide can't keep their doors open. This isn't some small company that decided to start up yesterday that had a risky business plan. This is America's leading lender.”

No sooner had those words come out than we received what appeared to be even worse news. Countrywide was forced to tap an equity line of $11.5 Billion to ensure the company’s continued viability.

For industry insiders and consumers alike, this packed one heck of a punch, nearly crushing whatever hope remained that the mortgage market would stabilize.

…Ahh, what a difference a week can make. Just today, Bank of America (the nation’s 2^nd largest bank) injected $2 Billion into Countrywide, thereby throwing their impressive weight behind “America’s Leading Lender.”

To some this won’t mean much. But to those who have followed the now infamous mortgage meltdown, B of A’s decision was pivotal. If nothing else this move boldly proclaims that B of A has substantial confidence in not only the viability of Countrywide, but they have confidence in the lending industry as a whole. But more importantly, B of A has faith in borrowers!!

That in and of itself, should certainly aid in restoring confidence. Even better, this may just mark the beginning of a calming mortgage market.