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Post by jeffolie on Jan 30, 2007 13:11:40 GMT -6
Countrywide (CFC) misses earnings, guides lower for 2007, yet says things will be rosy in 2008 Yet deep down, Mozilo knows he got out at the nick of time with his millions of option exercises. 2007 will be bloody. And he knows it. Sub-prime is cancer. NEW YORK, Jan 30 (Reuters) - Countrywide Financial Corp., the largest U.S. mortgage lender, said on Tuesday fourth-quarter profit fell 3 percent as housing market conditions worsened and loan servicing income nearly disappeared. The company also said it faces a "challenging" year in 2007, and projected a range of earnings per share that falls mostly below the average analyst forecast. Mozilo: "Looking ahead to 2007, the industry will likely see continued pressure on margins as mortgage origination volumes decline and industry capacity is rationalized. We are also preparing for increased borrower delinquencies and continued credit deterioration. We believe, however, that 2007 will likely be the trough year of the current housing cycle and that 2008 should represent the beginning of upward trends associated with the next cycle." yahoo.reuters.com/news/articlehybrid.aspx?storyID=urn:newsml:reuters.com:20070130:MTFH86938_2007-01-30_13-48-55_N30291157&type=comktNews&rpc=44
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Post by jeffolie on Jan 30, 2007 13:26:15 GMT -6
stunning increase of 782% in accumulated negative amortization Countrywide Earnings Dip; Neg-Am Surges Countrywide Financial Corp., Calabasas, Calif., has reported slightly lower fourth-quarter earnings than in the fourth quarter of last year, but also revealed a huge jump in accumulated negative amortization on its payment-option ARM portfolio. According to the lender's earnings statement, it holds $32.7 billion in option adjustable-rate mortgages on the balance sheet of its bank, a 23% gain from last year. But its option ARMs have accumulated negative amortization of $653 million -- a stunning increase of 782% over 12 months. Countrywide earned $622 million in the fourth quarter (down 3%), but had record earnings of $2.67 billion for the year. It funded $124 billion in the fourth quarter (mostly residential), an 8% drop from that of the fourth quarter of 2005. Acquisitions by its capital markets conduit fell 69%, to $2.7 billion. Countrywide now services $1.298 trillion in loans, a 17% increase from a year ago. The company can be found online at www.countrywide.com.
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Post by Ryan on Jan 30, 2007 13:31:53 GMT -6
785 percent? Geez. I'm thinking by 2008 several homebuilders will go tits up with that kind of inventory write offs. What happens if this hurricane season knocks out production in the Gulf of Mexico while the housing bubble deflates? Gas prices would rise.Would the housing market fall faster in that case?
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Post by unlawflcombatnt on Feb 2, 2007 2:20:04 GMT -6
stunning increase of 782% in accumulated negative amortization Countrywide Earnings Dip; Neg-Am Surges I thought I'd heard recently that Countrywide had either gone under, or was about to go under. Is there any truth to that?
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Post by jeffolie on Feb 11, 2007 12:37:56 GMT -6
There has been rumors of buyouts by BoA and another heavy hitter.
They may be scared off by Countrywide's announcement that their foreclosures have gone up 50%.
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Post by blueneck on Feb 11, 2007 16:44:45 GMT -6
Foreclosures have already reached near great depression numbers, so the possibility they will be going higher because of the subprimes is very scary indeed. Clearly the "light at the end of the tunnel" of consumer deficit spending is the train coming the other way.
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Post by unlawflcombatnt on Feb 12, 2007 3:25:01 GMT -6
Foreclosures are definitely on the rise. According to RealtyTrac, foreclosures are up 35% over the previous December, and this is the 5th straight month that more than 100,000 properties have entered the foreclosure process. The overall mortgage and housing market is disussed in a post at the blog "The Mess That Greenspan Made.
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Post by blueneck on Feb 12, 2007 5:24:05 GMT -6
For all the accolades Greenspan got, he was largely responsible for turning our economy away from one that produces to one that consumes thru his policy of artificially low interest and too easy credit. This has fueled the deficit spending both at the micro and macro levels, the boom in bankrupcy and foreclosure, and also created the negative saving rate because of the too easy credit and low interest disincentive to save.
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Post by unlawflcombatnt on Feb 14, 2007 15:24:09 GMT -6
For all the accolades Greenspan got, he was largely responsible for turning our economy away from one that produces to one that consumes thru his policy of artificially low interest and too easy credit. This has fueled the deficit spending both at the micro and macro levels, the boom in bankrupcy and foreclosure, and also created the negative saving rate because of the too easy credit and low interest disincentive to save. You're absolutely right. Consumer spending has been maintained by expanded credit and borrowing, not by wage increases. This makes any alleged economic "growth" completely unsustainable. Analyst Robt. Chapman provides a great overview of the situation in another thread titled A Bearish Assessment by Robt. Chapman
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Post by jeffolie on Feb 15, 2007 18:39:47 GMT -6
Countrywide REO's up 66% in just seven weeks - the kill zone I also “channel checked” Countrywide Financial’s REO site for California. Although it takes 4 months in California for the foreclosure process to return the house to the lender, I feel this is a great indicator because it shows these debts are no longer easily cured by short sales, or scratch and dent refinancing elsewhere. Basically, many if not most behind the eight ball mortgage debtors are just out of luck, and it shows in CFC’s numbers. My first count was on Dec. 27 when CFC held 360 REOs in California. On Jan. 12 it jumped to 483, Jan. 25th to 546, and Feb. 14th checked in with 596. Speaking of entering the kill zone, that’s a 66% increase in just seven weeks. www.countrywide.com/purchase/f_reo.aspwallstreetexaminer.com/blogs/winter/?p=434#more-434
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