Reactions to Today's Bank of America/Countrywide Acquisition News
January 11, 2008 by Andy Kaufman · View Comments
Big waves continue to ripple across the mortgage & real estate industries, as people begin to digest the news that Bank of America agreed to buy Countrywide for $4.1 Billion in Stock.
I know what you’re thinking… $4 MORE billion after basically throwing $2billion down the drain a few short months ago. Don’t worry, they have a plan. They’re getting a little help from us taxpayers.
Huh?
That’s because Bank of America, which is solidly profitable, will be able to use some of Countrywide’s losses to offset its own taxable income. The tax break could total about half a billion dollars over the first five years, according to an estimate by tax guru Robert Willens, who left Lehman Brothers Friday after a 20-year run and will be in business as Robert Willens LLC starting next week.
Awesome, eh? At least the people responsible for creating this mess will pay dearly, right?
Think again, Countrywide CEO Anthony Mozilo is going to walk with a severance totaling $110 million and change.
Matthew at Blown Mortgage has a thorough analysis that I’d recommend checking out. As an REO agent, I found these points were of particular interest
The real question we all want to know is how bad is Countrywide’s loan servicing portfolio? Rumors creeping out on The Street is that Countrywide has a very serious REO problem they are not reporting as of yet.
In California alone, Countrywide’s REOs have risen from 2,361 to 4,051 – a whopping 72% increase in just seven months. What are these numbers gonna look like in 1-2 years? Any math geeks want to extrapolate that one?
Well, at least I know of a good team of REO listing agents. Memo to Bank of Countrywide America: check the contact info in the top right corner.
Continuing on…
Over on BloodHound Blog, Brian Brady argues Why Bank of America is the WRONG Buyer
BA is buying problems with this CFC acquisition. The CFC sales force will not mesh well with the button-downed arrogance the BA crew exhibits. My prediction? CFC originators flee the newly-formed entity in droves during 2008. Mortgage brokers will reject the new entity because of their lousy customer service.
Who’s perfectly positioned to benefit from this exodus? Why, Wells Fargo, of course.
Wells Fargo, the mortgage lender disguised as a federally-chartered bank.
Over on Mashable, Paul Glazowski take a different angle and explains how the news will affect the big tech ad networks
The figures comprising Countrywide’s contributions to the coffers of the abovementioned ad networks (Microsoft, Yahoo!, and, yes, Google) over the past few seasons are fairly impressive. According to a Nielsen/Netratings assessment for the month of August, Countrywide spent $34.77 million on online advertising. Several months later, the company, still on its fateful decline, was then found to have increased spending considerably. In November, Nielsen showed it to deliver a total of $57.6m in its marketing efforts on the Web.
& to lighten things up Paul Kedrosky cracks a funny, saying that
…why should I have more confidence that Ken Lewis and BofA have timed this infusion better than their last one? After all, since their $2-billion for 16% deal months ago the stock has fallen 50%. Let’s just say that as far as bottom-spotters go I put more faith in Sir Mixalot than I do in BofA’s Lewis & Co.
Ba dum bum ching!
graphic via The Mess That Greenspan Made
Are Zillow, Trulia, Yahoo! & Google Ready to Adopt RETS?
January 3, 2008 by Andy Kaufman · View Comments
Yesterday, in an open letter to the heavyweights of real estate tech, newly-elected chair of the Real Estate Standards Organization, Michael Wurzer called on them to join together with the real estate community in supporting the Real Estate Transaction Standard (”RETS”).
In response to his letter, he got commitments from all 4 to meet during the upcoming Inman Real Estate Connect Conference in NYC.
Over the past year or two, managing & distributing listing data has become a huge pain in the butt, and by adopting a single standard for listing data, brokers will be able to
- Enter their listings only once.
- Send their listings to just the sites they want, easily.
- Not have to pay someone to manage a bunch of data feeds.
- Make sure their listings are updated right away when something changes.
- Not get calls or e-mails on listings that are already sold or expired.
- Get calls or e-mails on listings as soon as the data is entered.
Sounds good, eh? Sure does to me.
In a follow up post today, Wurzer asked, Do Brokers Care About RETS? I commented that I’m fairly certain that they would, if they knew about it; unfortunately most brokers have NO IDEA what it is and how it can benefit them.
That’s why I decided to get involved and joined the RETS Marketing workgroup.
I’m sure you’ll be hearing more from me as I get more involved, but I think the reaction to yesterday’s post is a step in the right direction and I’m looking forward to getting involved.
(h/t to David Harris for this tweet)
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