Another reason not to be a responsible borrower


Countrywide has just announced a plan to "help out" more borrowers who are in trouble on their home mortgages, particularly the ones with adjustable rates. The goal is to help people avoid foreclosure through a change in repayment terms. If you've got a loan with Countrywide and you're behind on your payments, now may be the time for you to cash in.

Full details of this new plan aren't available quite yet, but this looks to be something that's going to piggyback on the previous program that would allow borrowers to keep their low "teaser" rates. Of course, there are some crying that the poor homeowners aren't being helped enough.

I say hogwash! Borrowers got into adjustable rate mortgages with the knowledge that interest rates could increase once it came time for their rates to reset. They knew they'd probably have to refinance (maybe at higher rates), but took the risk on the interest rates anyway. Many of them bought more expensive houses than they could afford, banking on the hope that interest rates would stay low. But now it's time to pay the piper, and someone should bail them out?

I'll tell you what... I have my mortgage through Countrywide, and it's at an adjustable rate. When it comes time for my rate to reset, somebody BETTER help me out. I've never had one late payment, but that better not stop them from giving me a good deal on my new rate. And if it does stop them, then I'm prepared to do what's necessary to get a better rate. As I said in the past, I think it's time for me to lower my credit score a bit and get on the gravy train. No sense in being a responsible borrower these days!

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.