Bank of America and Countrywide Deal in Trouble?

I hate to be the bearer of bad news, but it seems there might be a problem here. Does B of A really want all the liability that is coming from Countrywide? I personally blame Countrywide for a lot of the problems going on in the mortgage industry, and quite frankly the economy. They gave many people loans that should of never gotten them. Here is a spot from Jim Cramer on his views on the B of A merger with CW. He makes an ominous comment about one and a half minutes into his thing. Enjoy. http://www.thestreet.com/video/10406994/index.html#10406994

Option Arms?

The option arms that are surviving the mortgage wars are actually pretty good. These are very distant cousins to the ones that everybody is in trouble with. The really good ones work like this: The minimum payment is from 3% to 4%, this keeps you from building up too much defered interest too fast. You can get a fixed rate around 8% or less, so you are not at the mercy of the market. They offer stated income options for situations that make sense. You can get these for investment, primary, and secondary residences. If you use them right, you can actually pay off your property sooner than with a regular mortgage.

Big Banks in Trouble

Big banks have only themselves to blame on this one. They entered markets and bought local community banks and for the most part erased any connection and duty they had to the local community. When a "big bank" takes over a local bank a number of things happen. All the money the bank kept locally was sent to another "central location"in another state. Most of the existing staff is let go and college "wannabees" were hired who have no clue past checking or savings accounts. They were hired and trained to sell the "product of the day" rather than what was best for the borrower. Then the local "trust" accounts were taken to a "central location" and, here a crime, the new managers of the trusts would then decide where the trust money would go, and often it wasn't what the trust was set up for initially. Example, there was a couple in Texas that saved all their lives and donated millions to a trust to support their favorite charity. A "big bank" came in and bought the local bank that was managing the trust. The "big bank" decided that the trust wasn't making enough money (the managers of the trust get paid on how much money the trust makes), so they stopped giving to the charity the trust was set up for. WOW! Now if the bank had been under local ownership and management it would of never happened.

Go into a bank today and go back in 30 days and see how many of the same people are still there. I worked for a year at a "big bank" as a mortgage loan officer and I was assigned a couple of branches to call on. I felt so sorry for the people at the branch. They were so overworked and under appreciated. Every day they would have their priorities by upper management changed, so in reality nobody could get ahead and people were constantly being shuffled around. It was like the bank didn't want anybody to become too good at their job.

Then came the mortgage mess. Where were the regulators during all of this? I saw a couple of them testifying on Capitol Hill and they sure didn't look smart to me. I never saw so many dumb looks in my life as I did that day. Whose money did the banks loose? Where did they get this kind of money to play with? Why does it seem that all their money was in mortgages? Why weren't they investing in their local communities by loaning money to businesses? Why aren't they responsible to the local community.

It seems to me that if we are going to allow "big banks" then they have to be held much more accountible for their actions. Otherwise I am all for eliminating "branch banking" and going back to much smaller and more responsible banks in this country.