Questions Arise As Top Mortgage Lender Fights To Stay Afloat

The nation's largest mortgage lender is losing money and that is sending shockwaves through the world's economy. Countrywide Home Loans revealed this week it's tapping into an $11 billion line

Friday, August 17th 2007, 5:00 pm

By: News On 6

The nation's largest mortgage lender is losing money and that is sending shockwaves through the world's economy. Countrywide Home Loans revealed this week it's tapping into an $11 billion line of credit to stay afloat. The company has run into problems because so many homebuyers have defaulted on their loans. What does that mean for people who got their houses through Countrywide? The News On 6â€™s Steve Berg reports if you're in your house, and you're making your payments, you're okay, but if you're looking to buy a house, that might be tougher.

Shawn Wittrock has his mortgage with Countrywide, so when he heard their name on the news, it got his attention.

"So I turned it up, and they were talking about having to tap into this line of credit to stay in business, and I thought whoa, what's that going to mean for me?â€ said Wittrock.

His first thought was for the roof over his head, but mortgage lender Bobby Williamson at First Omni in Tulsa says he doesn't need to worry.

"No, nobody is going to lose their home as far as anything to do with Countrywide,â€ Williamson said.

Even in a worst-case scenario, he says Wittrock would simply make his payments to whoever bought out Countrywide.

"If it's not Countrywide, if they went under even, there's going to be somebody out there to service your mortgage,â€ said Williamson. â€œYour home's not going to be taken away from your or anything like that."

So that's out of the way, but there are other problems that, as they often do, will hit the low-income buyers the hardest.

Lending requirements will tighten up for people who can't document their income or who have a shaky credit history.

"If you have a lower credit score, you may have a more challenging time obtaining money for the purchase of your home,â€ Williamson said.

Experts say that could depress a housing market that is already hurting in many areas of the country.

Shawn Wittrock meanwhile is just happy that his home is secure.

"I have my house, so I'm happy about that. My dogs will have their backyard,â€ he said.

Mortgage brokers say if your credit is good and you can verify your income, you shouldn't notice any changes when buying a house.

Watch the video: Homeowners On Edge As Top Mortgage Lender Taps Into Credit Line