Countrywide Financial is no longer an independent company. It was acquired by Bank of America during the credit crisis. Investors and home buyers looking to purchase an Countrywide REO home can do so with the Bank of America REO listings.
Countrywide was one of the most aggressive residential lenders during the real estate boom years. They used to fund borrowers with very little down payment and low credit scores. They needed very little documentation for their sub-prime and Alt-A offerings. Most of the mortgage loans they financed were not fixed-rate loans but Adjustable Rate Mortgages (ARMs).
Mortgage Banking involves origination, acquisition, securitization and servicing of residential mortgage home loans. Countrywide was one of the pioneers in this space. Just in 2006 alone, Countrywide had financed about 20% of all mortgages originated in the United States.
After the boom subsided, the great recession caused by real estate value declines, bank failures and credit tightening choked most borrowers who ended up with underwater mortgages. Basically, the value of their homes was lower than the mortgage loan outstanding on them. Faced with this situation, a historically high number of borrowers ended up defaulting on their monthly scheduled payments.
Countrywide REO properties are a great avenue for those seeking to profit from real estate investing. Even though these properties can’t be found anywhere under the brand name of countrywide itself, they make up a significant part of Bank of America’s REO homes for sale. At the time of its acquisition, Countrywide was just beginning to crack under the weight of foreclosure filings. The REO stage of distressed property servicing hasn’t started in full force at that point.
The old Countrywide REO department got merged with the internal REO asset management department of BOA. An REO department is the entity that is responsible for handling any and all steps involved in selling a repossessed property that had its mortgage note held by countrywide. The losses go up for a bank even after the foreclosure auction due to expenses accrued for maintenance and property taxes.
In order to reduce these overhead expenses, lenders and their REO departments are more than eager to sell off the homes to investors at a deep discount. Properties that were once financed by Countrywide now sit on Bank of America’ books as REO inventory at 50% – 70% of their original purchase price.
By doing good research a savvy residential property investor can unearth both single-family and residential multi-family homes for sale at a below market prices from the REO listings of Countrywide (BOA).