I spent the first part of this week scraping ice off of my windshield.  Winter is officially here and that’s a perfect excuse to look into something that will take the mind off of snow and sub-zero temperatures.  And that brings us to Raging Waters, a collection of three California water park attraction.

If you’re in or around the Los Angeles area, Raging Waters is one of two claims to fame for San Dimas, CA.  It ranks right up there with being the home of the iconic Bill and Ted of “Bill and Ted’s Excellent Adventure” fame.  Unlike the 80s comedy, however, Raging Waters is still attracting crowds every year.

Those in the bay area can hit the Santa Clara/San Jose location and those with business in the Capitol will be glad to know that Raging Waters is open for business in Sacramento, too.

The folks who run Raging Waters know a thing or two about creating a fun summer destination.  Palace Entertainment has placed three attractions on lists of the nation’s top ten water parks.  Both The Travel Channel and “Good Morning America” have honored Palace properties.

Not surprisingly, Raging Waters gets great customer reviews.  The bay area park averages a 4-star ranking at InsiderPages.com and this comment from “Jenni E” is representative of the opinions of those who’ve visited the park:

“Raging Waters is huge! All of the slides are great and many are so tall it’s scary! We always have a great time here. It’s good for all ages because there are thrilling slides for the big kids/adults as well as calmer slides or the river for litte kids. The only thing I don’t like here is that I worry about leaving my stuff out when we all go on the slides at the same time. Also, it’s not cheap but if you go all day it’s worth it.”

Obviously, you can have a great time at Raging Waters.  The only concern is probably found in the last sentence.  ”[I]t’s not cheap…”

Well, we all know that most vacation destinations, theme parks and tourist destinations fall into the “not cheap” category.  The real issues are whether the fun justifies the price tag.  With respect to Raging Waters, that certainly seems to be the case.

Those who might be on the fence about spending their money to cool off at RW on a hot summer California afternoon might want to consider one additional factor:  Raging water coupons.

Like most theme parks, Raging Waters issues coupons that can drastically cut the cost of admission.  When you can trim your cash outlay significantly it’s that much easier to justify (and to enjoy) a day in the water.  Anyone planning to hit the water park should probably try to get their hands on Raging Water coupons before they worry about renting a tube.

It’s off-season for Raging Waters right now.  Apparently even Californians aren’t crazy enough to play on the water slides in December.  As such, I wasn’t able to dig up any current online coupons.  However, I did find one site with some great advice.

LoveToKnow offers some helpful hints about Raging Waters coupons.  They write:

“Tickets for the Raging Waters parks range from $25 to $35 per guest depending on the park. Coupons can make visiting these parks more affordable for any budget, but coupons can be challenging to come by. Sources for coupons may include:

• Local grocery stores or chain restaurants
• Local credit unions
• Local employers who offer discounted tickets to their employees
• The Anaheim Funbook and other local attraction guides
• Coupons on the official website…
• Coupons printed on park brochures

Coupon offers are usually available only for a limited time and may have a variety of restrictions. Be sure to read all offers carefully before using, and check for restrictions such as expiration date, limits on the number of discounts, blackout dates, which parks the offer is valid for, and other qualifications.”

The article also offers some information on other Raging Waters discounts and ways to trim costs while cooling off.

Strangely, the character of Rufus had this to say about San Dimas in “Bill and Ted”:

Hi. Welcome to the future. San Dimas, California, 2688. And I’m telling you, it’s great here. The air is clean. The water’s clean. Even the dirt… is clean. Bowling averages are way up. Mini-golf scores are way down. And we have more excellent waterslides than any other planet we communicate with.

Looks like Raging Waters is getting the job done well ahead of schedule.

What happens when you combine theme park sensibilities with educational opportunities?  You get Moody Gardens.  This massive attraction has become one of the Houston area’s biggest tourist attractions and it gets good reviews from the bulk of those who make the journey.

If you’re looking for something to do in the Houston area or are planning on heading to Galveston, there’s a pretty good chance that you’re going to consider a trip to Moody Gardens.

MG offers well-maintained beaches, a fully-operational and constantly-cruising old-time paddlewheel boat, a convention center, hotel space, an impressive publicly-accessible golf course and restaurants.  Oh, and that list didn’t even mention the biggest aspect of the center–the pyramids.

That’s right.  Pyramids.  Three of them.  They’re huge (over ten stories tall) and they’re made of glass.  One pyramid plays host to a tropical rainforest ecosystem complete with free-flying birds.  Another features sea life from all around the world as part of a world-class aquarium.  The final pyramid features science exhibits, including plenty of NASA stuff and multiple IMAX theaters and rides.

Here’s the pitch, as stated by the folks at Moody Gardens:

Looking for island fun? Work or play, this tropical destination is ideal for families and groups alike. Delve into the oceans depths at the Aquarium Pyramid® to see penguins, sharks and thousands of tropical fish. Step into the Rainforest Pyramid® that features a diverse collection of exotic tropical plants and animals. Explore the mysteries of science at the Discovery Museum or experience the action of the IMAX® 3D, 4D or Ridefilm theaters. Cruise aboard the Colonel Paddlewheel Boat or enjoy beautiful white sand beaches and blue lagoons at Palm Beach. And, whether it’s a weekend retreat or an extended stay, the spectacular Moody Gardens Hotel, Spa and Convention Center has the accommodations and service for an ideal getaway.

It wouldn’t be honest to pretend as if the Moody Gardens experience was flawless.  You’ll find plenty of people who didn’t have the times of their lives at the complex.  That’s true for every attraction, though.  Overall, people seem to love the Gardens–even when they have a few minor gripes.

One gripe, however, seems to come up a little more often than others.  Considering the content of this blog and the state of the economy, you can probably guess what that complaint is:  Money.

Moody Gardens probably isn’t the most expensive thing to do in the Houston area, but it sure is a lot more expensive than a cheap seat to watch the Astros.

Locals who can make regular use of the facilities might be able to get off cheap on a per-trip basis by purchasing an annual family membership, but visitors and vacationers will end up forking over at least a pair of twenties for every person who wants to check out MG.  And that’s just the admission price.  Once you’re in, you can expect to continue the spending spree with the usual overpriced extras, refreshments and souvenirs (although Moody is better in this regard than many other tourist hot spots).

That’s why one reviewer noted, “Make sure you have coupons or you will pay through the nose for this little slice of alternate reality.”

Fortunately, you can find coupons for Moody Gardens in a variety of different locations.  They’ve been known to show up in The Houston Chronicle on Sundays and a simple Google search will turn up more than a few different places to secure coupons for Moody Gardens online.  Sites like MapAmerica and AllAcrossTexas frequently host cost-cutting coupons for MG admission.

Let’s be frank.  Amusement parks and tourists attractions are expensive.  Period.  Moody Gardens is not an exception to the rule.  You’re going to get whacked around at the front gate on admission and once you’re on the grounds, they’re going to do their damnedest to separate you from your cash whenever possible.  If you’re looking for something free or cheap to do in Houston, don’t even think about the Gardens.

However, you can manage your costs with coupons for Moody Gardens and a little self-control.  That will give you and your family to enjoy some great diversions and to get up close and personal with wildlife and scientific exhibits that you may not encounter otherwise.

Now that we’re at least a month away from the elections, can we look at the proposed Obama tax plan in a way that’s at least slightly more grounded in reality than most of the editorial content composed during the campaign?

That criticism cuts both ways.  For every wannabe resource dedicated to the stacking of half-truths without context in order to sink Obama there was a “Barack is perfect” wannabe pundit transforming hope into delusion at The Huffington Post.  I don’t know if the kneejerk Joe the Plumber fans or the “eat the rich” crowds really made a lot of difference in terms of electoral outcomes, but I am fairly certain that neither crew did much to advance the public’s understanding of candidate policy positions.

Now that the smoke has cleared, it turns out that all of the misinformation may have been just as factually accurate as the correct assessments of Obama’s campaign advocacy.  The Obama tax plan of the summer and fall may not bear a great deal of resemblance to the Obama tax plan of January, 2009.

Critics will call it flip-flopping, supporters will call it an informed change of opinion based on current economic conditions.  Some on the right might think Obama is coming to his senses while some on the left may feel like he’s selling out.  However you characterize it, it’s clear that Obama’s original approach to taxation seems to be in a state of transition.

The heart of the matter is the repeal of the Bush tax cuts.  Painted as a tax break for the wealthy that did little or nothing to aid the middle class, Obama’s campaign hammered on the policy throughout the campaign.  If anything was crystal clear about the Obama tax plan throughout the campaign, it was his disdain for the Bush cuts.

Now it looks like Obama might be a little reticent to do away with the cuts upon taking office.  In a recent interview with Tom Brokaw, for instance, Obama indicated that his economic team was considering whether it made more sense to pursue legislative action to do away with the cuts (the position taken during the campaign) or to let them expire on their own accord.  That sentiment was also expressed by high-ranking Obama adviser David Axelrod.  Allowing the Bush cuts to expire without legislative action would keep them in place until the end of 2010.

So, there’s a decent chance that the Bush cuts might be with us for another two years.  What’s happened to create this shift in perspective?  There two prevailing schools of thought on the matter. 

 Obama might be heeding the warnings of those who believe that any tax increase (including increases created by elimination of a reduction) during a recessionary period could further damage the economy.  Remember, things weren’t nearly as bad as they are today when Obama was campaigning and advocating an immediate dismantling of the Bush tax policy.

Alternatively, Obama might be making a political decision with respect to the cuts.  Many in more conservative circles are up in arms over the idea of doing away with the tax breaks and Democrats who’ll be up for reelection in two years may not be particularly comfortable with the idea of voting on a bill that would, essentially, raise taxes for at least part of their constituency.  You don’t want to fire up the re-election campaign during a bad economy while wearing an “I increase taxes” lapel pin.  By allowing the cuts to expire on their own accord, the Bush cuts could disappear without requiring anyone to make a potentially damaging vote on the issue.  That, some argue, would be good for Obama’s 2012 chances and for keeping congress blue.

Obama himself does a good job of explaining the current state of the Obama tax policy:

“I think that the plan that we’ve put forward is the right one, but, obviously, over the next several weeks and months, we’re going to be continuing to take a look at the data and see what’s taking place in the economy as a whole.”

In other words, things are less clear in December than they were in November.

If you’re not going to be ready to send Uncle Sam your 1040 on April 15, you won’t be alone.  The late filing of federal taxes is anything but uncommon and the U.S. tax code is structured to recognize the inevitability that some of us aren’t going to meet the usual deadline.  However, the laws are not arranged in a way designed to give you any extra time with respect to actually paying your taxes.

You can get by with late filing of federal taxes, but you can’t escape your obligation to pay on time.

Here’s how late filing works:  If your returns aren’t going to be ready, you can complete and submit Form 4868 by April 15.  This “Application for Automatic Extension of Time to File U.S. Income Tax Returns” (what a pithy title, huh?) will automatically extend your deadline until the second week of October.

Completing a 4868 will not, however, completely alleviate your obligation to pay income taxes until October.  The IRS still wants your money in April.  Thus, you’re expected to submit payment with the application for a time extension–even though you probably don’t really know how much you owe at that point.  If you overpay, you’ll get the remainder back in the form of a refund.  If you underpay, you’ll still be on the hook for the balance due.

It’s actually a little worse than that with respect to underpayment.  If you underpay when you submit your application for an extension, you’ll be responsible for the remaining tax liability PLUS fees and interest charges.

Basically, asking for extra time to file is going to keep you within the law, but it isn’t going to give you a way to delay actual payment.  If Federal law requires that you file income tax returns, you have two choices to stay within the law.  You can either complete your returns on or before April 15 or you can request additional time via a 4868 submission and then complete your filing in October.  Either way, however, Washington wants your money on time.

Although you’ll still owe interest and penalties on unpaid taxes with a 4868, you can avoid additional expenses.  Jen Jones explains how the IRS penalizes those who don’t “get permission” to wait until October:

A late filing penalty results in a penalty rate of 5% for each month or partial month that the payment is late, with a maximum penalty of 25%. If you previously filed a Form 4868 before April 15^th, you will not receive this penalty unless you miss the new due date of October 15^th. The late filing penalty reaches the maximum penalty after five months, but continues at a penalty of 0.5% for each month up to 45 additional months. If you wait the entire period of time, this can result in a total of 47.5% penalty. This penalty is based on the amount required to be shown on the return, not the amount shown as due. Also, if you are audited and the actual tax liability is higher than the original balance, you will have to pay the late filing penalty on the difference.

The best advice?  File on time and pay up as soon as you can.  If you want a vivid example of just how ugly things can get if you don’t file your taxes on time, take a look at Charles O’Byrne.  The New York Governor’s former Chief of Staff amassed a shocking debt to the government after failing to settle up his tax bills.  Although O’Byrne’s lawyers are hoping to convince the courts to cut him some slack with some creative argumentation, the rest of us probably can’t count on a finding of “late filing syndrome” to save us!

NOTE:  If your late filing of federal tax situation involves past years remember that, as the IRS says, “it’s never too late to file.”  You can find the government’s recommendations on handling older tax obligations here.

Want some money for school?  Live in Iowa or going to school there?  A student loan may be an option to consider.

What is an Iowa student loan?  Well, like many other loan products, the name can be a little confusing.  Basically, the name refers to an organization that manages federal student loans in addition to offering a few loan products of its own.  Following is an overview of the organization from the Iowa Student Loan website

Iowa Student Loan was established in 1979 as a private, nonprofit corporation with a mission to help students and parents obtain the financial resources needed to fund postsecondary education. Since then, Iowa Student Loan has helped more than 260,000 students pay for college.  The company is based in West Des Moines, Iowa, and employs 370 employees. Today, Iowa Student Loan has managed $3.7 billion in student loans.

Who is eligible for an Iowa Student Loan?

The answer is “it depends”.  The organization manages federal student loans such as the Federal Stafford Loans, Federal PLUS Loans and Federal Grad PLUS Loans. Students need to fill out the Free Application for Federal Student Aid (FAFSA Form) to find out if they are eligible for federal loans.

In addition, the Iowa Student loan organization offers private loans that are state-specific, such as the Partnership loan.

Eligibility criteria depend upon the type of loan for which you are applying.  These loans are designed specifically to help those individuals who have already exhausted their other sources of income and are in need of additional assistance to complete their education

Are there any special programs?

The Iowa Student Loan organization has been a leader in providing special services to certain groups very much in need of assistance.  For example:

• The Iowa Student Loan Nursing Education Loan Forgiveness Program, which offers loan forgiveness rebates totaling between $5,000 and $20,000 over a four-year period, was created to provide recruitment and retention incentives to reduce the shortage of nursing educators and nurses in Iowa.
• The Iowa Student Loan Teacher Education Loan Forgiveness Program is designed to aid recruitment and retention of teachers in state-designated shortage areas, with loan forgiveness up to $9,000.
• In 2007, Iowa Student Loan created the Armed Forces Interest Reduction Program offering 0% interest on private student loans for service members who have served, or are serving their country during wartime efforts since Sept. 11, 2001.

Where can I learn more?

The first place to stop for more information about Iowa Student Loans is their website at www.studentloan.org.  Here you will find a wealth of resources, including:

• Frequently asked questions about students loans and the Iowa student loan approach
• Forms / applications and step-by-step instructions for applying
• Tips and techniques for managing your loans, including budgeting advice and how to sign up for automatic payments
• Calculators to determine what your payments might be under certain loan scenarios

With so many options for financing a post high-school degree, there’s no excuse for not plunging into the world of higher education – especially in Iowa.

HSBC is a world bank that was heavily invested in American subprime lending. In 2007 HSBC had one third of its business in the United States and 75% of its bad debt, mostly as a result of the subprime meltdown. In early 2007 HSBC fired two of its top executives, Bobby Mehta of HSBC Finance and Sandy Derickson, CEO of HSBC Bank USA and Vice Chairman of HSBC Mortgage Finance for their part in the huge losses and write down that hit the lender through bad subprime debt.

In 2003 HSBC Mortgage Finance bought out Household Financial for $14.2 billion. At that time, Household Finance was the largest sub-prime mortgage lender in the United States. Household Finance was the subject of numerous lawsuits at the time due to alleged discriminatory lending practices and was under intense criticism for its troubled, badly-organized book of messy loans.

Allegations of abuse include charging higher points and fees for minorities, women, and elderly persons, and targeting these groups for loans with unfavorable terms even when they qualified for better terms under the corporation’s own underwriting guidelines.

By the first quarter of 2007, HSBC Mortgage Finance had taken over the not-so-coveted role once occupied by Household Finance as new king of the disorganized, money-losing subprime mortgage lenders. Mehta and Derickson were invited to leave (with generous severance packages totaling in the millions), and HSBC began to shut down HSBC Mortgage Finance offices and lay off brokers, loan originators, and support staff.

At the end of 2007, HSBC still had taken losses of well over $10 billion due to subprime lending in the US, well over what it had initially anticipated, and was being talked about in financial circles in the same breath as now-infamous Bear Stearns. HSBC closed two of its largest mortgage lending arms, Decision One and HSBC Mortgage Finance, and announced it was no longer selling and trading mortgage-backed securities in the United States.

HSBC continues to service mortgage loans and holds securities backed by mortgages in countries other than the US. Its webpage http://www.us.hsbc.com/1/2/3/personal/home-loans/mortgage/mortgage-programs still lists a variety of home mortgage loans as being available including more exotic options such as interest-only loans combined with ARMs, Jumbo loans, blended loans, limited documentation loans (also known as ‘stated income loans’ because the borrower simply states his or her income without having to prove it), and straight interest-only loans.

Whether or not HSBC is actually writing any of the loans that customers apply for is a separate question. Most likely HSBC is writing very few mortgages in the US, and like many other banks heavily invested in the US mortgage market, is still working hard to divest itself of anything even tangentially related to it. The degree to which world banks were damaged by exposure to the US mortgage market continues to alarm the worldwide financial industry.

At a time when a college education can cost tens or even hundreds of thousands of dollars, anyone aspiring to higher education might want to look in to their student loan options.  Believe it or not, one of your best options might be government student loans.  If you’re in this situation, you should explore the choices at both the federal and state levels of government.

As you are diving into a review of the various government student loans, think about the following questions for each program you look at:

• Who is eligible?  Most programs are targeted to undergraduates, although some are available to graduate students as well.  In addition, some programs focus on full-time students, whereas others provide funding for part-timers.  For each program, it is important to understand the eligibility requirements and how they relate to your situation.
• Financial need?  Some programs require the student to demonstrate a certain level of financial need, whereas others offer loans to students regardless of their overall financial status.
• Who is the lender?  Some programs offer loans direct from the government, whereas other programs are structured to offer guaranteed loans through banks and other financial institutions.
• What are the terms?  Two important things to look at are the interest rates and payback terms.  Most government student loans offer favorable rates (far more favorable than the commercial market), which will come in handy when you’re making payments after graduation.
• Loan deferment?  You’ll also want to know if the loan you’re considering is eligible for deferment programs.  In some fields if you agree, for example, to spend a year teaching in a low-income community you may be able to defer your loan payments or even has some of your debt forgiven.

Federal Government Student Loans

The U.S. Federal Government offers a wide range of government student loan programs for those seeking a higher level of education.  Some to consider include:

• Perkins Loans:  Dependent on financial need.  Up to $4,000 a year for undergraduate and $6,000 per year for graduate work with a maximum of $20,000 at the undergraduate level and $40,000, including undergraduate loans, at the graduate level.  Available to part-time students in addition to full-time.
• Stafford Loans:  Not dependent on financial need.  Loan amounts depend on a variety of factors.  Interest rates and payback terms are variable.
• Parent Loans:  Finally, government student loans are available to the parents of college aide students.  The amount of the loan will depend on the amount of aide the student is already receiving as well as the cost of the school.  Students must be enrolled at least half-time.

You can learn more about federal student loan programs at http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp .  In addition, a useful chart is available at: http://studentaid.ed.gov/students/attachments/funding/PerkinsLoanInfo.pdf

State Government Student Loans

Almost every state has its own student loan programs as well.  You can access information about these programs at http://www.students.gov/STUGOVWebApp/Public?topicID=24&operation=topic Here you’ll find a list of all 50 states (and the District of Columbia).  Click on any of the links to learn about the government student loan programs in that state.

Utilizing a combination of Federal and State government student loans, you’ll be on your way to a higher education in no time!

EMC Mortgage is a subsidiary of The Bear Stearns Companies, Inc, the same Bear Stearns that was recently sold to J.P. Morgan Chase Bank in a deep discount deal brokered by the Federal Reserve.

The Federal Reserve, in brokering the sale, was attempting to prevent a domino collapse of hedge fund and investment banks heavily invested in subprime mortgages.

On their official website at: https://www.emcmortgagecorp.com/EMCMORTGAGE/ EMC Mortgage describes itself as “one of the largest purchasers in the country of Scratch & Dent and non-performing residential mortgages.” The site claims that the EMC Mortgage underwriting staff reviews the purchase of non-performing loans thoroughly with regard to “…credit, documentation, litigation, default and servicing related concerns as well as a thorough compliance review with loan level testing.”

The recent fire sale of Bear Stearns tends to make such assertions suspect. While the official EMC Mortgage website points proudly to an above average Standard & Poor’s rating, it is worth noting that Standard & Poor’s gave Enron a decent rating too, only four days before the firm collapsed in one of the greatest corporate scandals in US history.

Ratings agencies are notoriously slow-moving and conservative. EMC’s website does not mention that Moody’s downgraded their rating of EMC Mortgage in September of 2007 due to extreme volatility in the subprime sector and EMC’s exposure to it. (The website does list the current downgraded Moody ratings however.)

EMC Mortgage Corporation asserts that when buying and selling subprime or Scratch and Dent loans, “…we at EMC execute the firm’s value maximization philosophy and company strategy of thinking creatively.” Today it seems clear that it is precisely this kind of ‘creative thinking’ that caused the confusion and extreme volatility that sank eventually Bear Stearns.

The Mortgage Lender Implode-O-Meter, a tongue-in-cheek but fairly accurate watch site for the current subprime lending crisis had this to say about EMC Mortgage in mid-March, right before the announcement of the Bear Stearns fire sale:

…We just heard the EMC division (Correspondent) was given notice. According to the email we received “Some have until May 30th (to work) to receive small severance.” The tipster said “They have roughly 30 people left plus some sales staff”

Since J. P. Morgan Chase does have its own, less troubled mortgage division, it’s difficult to predict the long term future of EMC Mortgage, but it doesn’t look good.

Even more troubling is a pending class action suit brought against EMC Mortgage and their Scratch & Dent subprime mortgage division claiming that EMC Mortgage targeted minorities and used deceptive and unethical practices such as “…force placed insurance, lost and misapplied payments, paid taxes that were in escrow late throwing the borrower in delinquent status etc…” http://ripoffreport.com/reports/0/320/ripoff0320022.htm

In the latter part of 2007, EMC Mortgage did initiate and widely publicize the creation of a 50-employee team they cheerily dubbed the “Mod Squad.” Ostensibly the Mod Squad’s task (if they chose to accept it) was to work with subprime borrowers in default or in danger of imminent foreclosure.

The Mod Squad got lots of good press last summer after its formation was first announced. All that good press no doubt helped the EMC Mortgage Corporation’s image. However some basic math raises doubts about the effectiveness or seriousness of the team.

The EMC Mortgage website itself states that EMC services over 440,000 loans. If 8% of those subprime loans were in default at any given time, a percentage not at all unusual, then each Mod Squad caseworker would have had a case load of 700 or more borrowers. And that is assuming EMC really has 50 employees left.

Given the pending lawsuit against EMC, and the eventual fate in March of 2008 of The Bear Stearns Companies and its subsidiaries, it seems at least possible that the Mod Squad might have been more of a PR gesture than a genuine innovation. Whatever the original intent, it all seems to be a nonissue at this point, as the financial world waits to see what, if anything, survives of Bear Stearns and its subsidiaries.

Country wide Mortgage was the largest single mortgage lender in the United States. Recently acquired by Bank of America, Countrywide Mortgage suffered deep and irreparable losses due to subprime lending practices during the housing bubble of the past several years. Countrywide is also is the subject of numerous lawsuits alleging it abused bankruptcy and foreclosure proceedings and kept sloppy records making these proceedings unduly complex and in some cases nearly impossible.

Country wide Mortgage lost $1.2 billion in the third quarter of 2007 and another $422 million in the fourth quarter. During that same time period, their stock price plummeted by 80%. Nevertheless, CEO Angelo Mozilo was awarded $1.9 million and $20 Million in stock awards for his performance that year. When Countrywide was sold to Bank of American in early 2008, Mozilo was set to receive an additional $112 million in severance as a condition of the sale.

Under heated attack from the press and widespread charges of fraud and abusive lending, Mozilo eventually gave back a portion of his severance package, but he is by no means out of the woods. The controversy over his part in the failure of Countrywide continues, and the FBI has confirmed that Countrywide is one of a number of major lending companies under federal investigation right now for mortgage fraud.

Bank of America offered to acquire Countrywide for only $4 billion earlier this year, but is now backing away from that deal as quietly as possible. In early May of 2008 Standard & Poor’s cut the status on credit default swaps for Countrywide’s senior debt to junk. Meanwhile first quarter profit for Countrywide in 2008 plunged another 74%. In early May of 2008, Countrywide Mortgage stock was trading for 35% less than Bank of America’s initial low-ball offer.

Bank of America recently stated that is reconsidering whether or not to back the $38 billion in bad debt that will be on Countrywide’s books at the time the sale is closed. If Bank of America decides not to back the bad debt, then their rescue of Country wide Mortgage amounts to no rescue at all. In such a scenario, the taxpayer would likely end up footing the bill for Countrywide’s alleged malfeasance, and that bill is staggering.

Even so, why should Bank of America buy out Countrywide under current conditions? No doubt part of their reluctance is due to the lack of transparency about the true extent of the bad debt Countrywide currently holds. $38 billion is a lot of bad debt, but the ongoing FBI investigation and the lawsuits alleging bad record keeping and corporate incompetence suggest that the actual debt might be much larger. Since Bank of America is currently the only buyer offering to absorb Countrywide, it has no reason to rush into the deal under these conditions. It can afford to stand back and wait and possibly buy Countrywide for even less money later or maybe not at all, ever.

While Countrywide is technically still writing mortgages, its health and its future are in such serious question that it is hard to imagine a circumstance under which it would be the lender of choice.

Citi Mortgage writes fixed rate conventional, VA, and FHA mortgages, with fixed rates terms available for 15 or 30 years.  Citi also advertises a variety of variable rate mortgages. That start with a low, introductory fixed rate for the first 10, 7, 5, 3, or 1 year, and then reset to a variable rate tied to prime for the rest of the life of the loan. Citi Mortgage advertises their ARMs as, “Pay Less Now/Get More Now.”

Citi also claims to still offer interest-only mortgages, although playing around with the rate calculator at the Citi Mortgage website http://www.mortgage.com/ revealed that interest-only mortgages do not appear to be available at this particular time anywhere in the US. That’s not surprising given the current financial condition of the corporation, which is not good, to put it mildly.

Citi Mortgage is a part of Citigroup, one of the major issuers of subprime loans, and one of the most heavily damaged by the housing downturn and the subprime lending crisis. In November of 2007 Citigroup took a $7.5 billion loan from Abu Dhabi on poor terms just to stay afloat after suffering staggering losses. Shortly thereafter, Citigroup replaced its CEO.

In January of 2008, Vikram S. Pandit, the new Citigroup CEO, brought all of Citigroup’s mortgage activities under one entity that today retains the name Citi Mortgage. Before that, Citigroup also had a subprime lending arm called CitiFinancial, and on top of that, all of its mortgage lending and collection activities were split between its investment and consumer bank divisions.

By bringing all of Citigroup’s mortgage activity under the Citi Mortgage consumer division, Pandit aimed to reduce confusion and loss, and get better control over the corporations mortgage lending practices.

In March of 2008, Citibank then announced plans to pare its residential mortgage holdings by 20%, or roughly $45 billion, in an attempt to unload some of its riskier mortgage holdings and thereby reduce its subprime losses even further. It also cut another 2,000 employees from its payrolls.

More recently, Citi Mortgage’s parent Citigroup settled out of court on a $1.66 billion pay-out for its part it in the damages done to Enron shareholders during the Enron scandal.

It hasn’t been a very good year for Citigroup.

Citi Mortgage president Bill Beckman hopes reduce Citigroup’s mortgage holdings by selling 90% of the home loans made through his unit by the third quarter of 2008, and in the meantime by only making new home loans that are not meant to be sold.

In terms of individuals shopping for a mortgage loan right today, what this means is that no matter what Citi Mortgage has up on its public website, it might not be the easiest place to get approved for a new loan.

The real question however is, why would anybody want a mortgage with Citi right now? Despite the fact that Citi Mortgage still advertises creative mortgage products on its website, Beckman’s announcement means that they will be making very few, if any, new creative loans and will be dumping the ones it still has as soon as possible.

Some analysts believe that Citigroup has gotten too gigantic and complex, trying to be all things under one enormous roof, and can no longer manage itself properly.