Countrywide Foreclosures - Countrywide Foreclosure proeprties - Countrywide REO homes

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The biggest american bank - the Bank of America is found in Charlotte, N.C.. A lot of people knows about Countrywide Financial - the organization that received a loan of more then 4,1 billions US dollars, and finally became a reason for a mortgage crisis. Exactly the Bank of America financed this loan for Countrywide Financial. As Countrywide Financial failed to pay back, Bank of America became the biggest foreclosure lender in the country. Both sides had their own advantages in this purchase operation - on one hand Countrywide was saved from financial fail, on the other hand Bank of America improved its positions on market.

We have to underline, that this operation let the BofA have its own part in 25% of home loans in the United States. The transaction described above is simply one example out of great number of cases, when financial institution gets substantial advantages after financing problem loans. Such kind of loans are also known as subprime loans, of course this situation attracted a lot of attention, all owners of subprime loans were checked. The main source of financial resources for loans is the money saved on deposit accounts by clients. But Countrywide Financial works according the different scheme, it takes loans on the Wall Street, so it obtains amount of money enough to invest it in mortgages, and after all sell these loans on secondary market. These transactions are held again and again, which enables the lenders and borrowers get their additional money. This scheme worked without problems until we faced the mortgage crisis. After becoming the owner of Countrywide Financial the Bank of America became the owner of over 5800 branches situated in 31 different states in US.

More over Bank of America unites 700 loan offices and 200 banking centres situated all over the United States of America. Taking into account that almost all borrowers loose their real estate at the end, this investment is highly successful deal for Countrywide Financial executives. The next step of BofA will give a chance more then 260 thousand borrowers with problem loans save their homes. it will happen as a result of modifying more then 40 billion US dollars of mortgages. All this is planned to to be held during the upcoming two years. A big number of problem borrowers leads to increase of Countrywide foreclosures number.

Post foreclosures (REO)

REO property or real estate owned property belongs to banks. How does it happen that banks own a real estate? Well, it is easy to understand: bank gives a loan, so mortgage appears, if client cant pay his dept and if there are no ways to avoid foreclosure, the home becomes the property of financial organization. It may seem that foreclosures can’t bring high profits as bank want to sell it offering the price which will at least cover the amount of the first loan. On the other hand, if you will be more attentive, you will see some ways to benefit greatly from buying a foreclosure house.

It may be the situation, when more then one loan is secured to the real estate; actually it happens quite often nowadays. In case second lender doesn’t make payments to the first lender and starts own foreclosure procedure, in this case the second lender is not part of foreclosure process any more. That is the main reason why plenty of second mortgages are valued around 20% less then the normal market price.

Bank doesn’t benefit from being an owner of a house; it needs money to flow constantly to get higher net profit. More over keeping a foreclosure as an asset may cause additional expenses. That is why bank wants to sell this burden as soon as possible, and it is likely to accept even not high price, just to cover the dept.

countrywide reo, countrywide foreclosures

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