Countrywide is selling itself at fire-sale prices to Bank of America. It has laid off tens of thousands of employees. Investors in its stock and bonds have been hammered. Homeowners across the country are defaulting on its mortgages and the federal home loan bank is on the hook for many of those losses. So what is Countrywide’s management doing? Hosting a 3-day get-away for some its best friends at a ski lodge!
As Diana Olick of CNBC put it: “There’s something called remorse…Clearly Countrywide Financial is not in touch with that emotion right now.”
One great irony of this is that mortgage bankers, like Countrywide and its guests next week, are opposing legislation that might lighten the load on consumers by allowing them to modify their mortgage in Chapter 13. That might stem the tide of some of the foreclosures, keep people in homes, and reduce the losses for investors. That’s the last thing our ski fans will want.
It must be nice to be a mortgage banker. The Rocky Mountain News reports that first on the agenda when Countrywide’s friends arrive on Monday, at the Bachelor Gulch Ritz-Carlton resort in Avon Colorado, will be dinner at Spago’s and ski gear fittings. In the following days, dinner will be provided at Zach’s Cabin (where you arrive by sled), and Larkspur in Vail. There will be meetings. And skiing. Something tells me a lot of skiing. As the slogan for Beaver Creek puts it, “Not exactly roughing it.”
It’s not exactly a surprise that Countrywide is under scrutiny. And it’s hardly a surprise that mortgage bankers are, well, greedy. That is what makes American capitalism great. It is perhaps a little astonishing that a company which has lost so much money, has laid off so many of its “family,” and is foreclosing on so many homeowners across the country would — could — be this tone-deaf.
But it’s important to remember that allowing bankruptcy judges to modify mortgages will drive up the costs of home lending and make it unaffordable!
I hope that they at least put down the caviar and champaign before they say that to Congress next week.
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