Bank of America Buys Countrywide
OK, I'm not one to care a lot about business moves because the real reasons for them are most often than not inaccessible to the public. Oh, there's a public spin on the deal, but the real underlying reasons are often much less noble, and are far more focused on the profit a few can make on the deal.
However, today's announcement that Bank of America (my personal Bank) buying Countrywide (the holder of my mortgage) has me both interested and a little upset at the sub-prime lenders. I'm a "30 year fixed" person, myself. Yes, it means that I could possibly get more house with less per month if I did some more creative financing, but that's not the purpose of a mortgage, in my opinion. I need a roof over my family's head. I need stability for them. I don't need to play a game with my kid's home. I need to be reasonable, and safe.
So the idea of sub-prime mortgages is just something that may get some people into homes they could not afford otherwise, but in the end, I'm not sure that they can stay in those homes. Face it... if you can't afford the mortgage, then what makes you think you can afford the house? Taxes always go up... fees... assessments... all those costs with a home always rise. So if you can't afford the house to day on even a standard ARM, why get in at a sub-prime level? You're not going to be able to keep the place unless you start to make a lot more money - but at that time you're refinancing the mortgage and you're not sub-prime anymore.
So when I see this I get a little angry. Countrywide is in trouble, and while they aren't going to foreclose on me, they might have to sell assets to stay above water. But then my bank comes in and buys it up, so I'm bailing out myself. I sure hope it works out for me. In the end, it's stability that the markets want, and this offers some, which is good. But wow... I didn't see it coming.