Hmmmmmmmmmmm. First, if a person buys a home, she/he becomes the title holder, and thus the homeowner, regardless of its equity. Second, Countrywide might have stumbled onto something: the pay/optional homeowners won't pay, and their homes won't be foreclosed upon, and (given enough time) home prices will recover. At a minimum, today they won't have to join the legions of homeless who don't have the option to pay less.

Hi Zac;

We have the National Mortgage Complaint Center & we have been warning about "pay option mortgages" for years. But now CFC saying that they had no idea that pay option arms are a "problem" & "now they are concerned" is a good one. This is almost as funny as CEO Angelo going on CNBC last February saying "Countrywide is a great company & we are well positioned"......that is, as he was dumping shares in his own company.

Actually the pay option mortgage product exposure is not just limited to CFC. WA MU and Wachovia also went heavy on this insane mortgage product. WA Mu may not survive as would be the case for CFC, had not Bank of America & Ken Lewis stepped in. (we are not sure if Ken stepped in---or stepped in it?-----we are inclined to think he stepped in it---whew that smell)

What is amazing about Wachovia is they are still running TV ads promoting this insane product.

And its just when you thought Wall Street & banks could not get any more foolish.