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Post by jeffolie on Sept 11, 2007 11:41:17 GMT -6
Countrywide Shares Fall on Report Lender Needs Cash (Update3) By Steve Dickson Sept. 11 (Bloomberg) -- Countrywide Financial Corp., the biggest U.S. mortgage lender, fell as much as 5 percent on the New York Stock Exchange after the New York Post said the company is negotiating a second multibillion-dollar bailout. Countrywide handles one of every five new U.S. home loans. More than 100 mortgage companies have sought buyers, halted applications or closed since the start of 2006, hurt by falling prices and record foreclosures. Countrywide said last week it would eliminate as many as 12,000 jobs, or 20 percent of its workforce, after investors stopped buying loans and bankers alarmed by rising subprime defaults refused to provide capital to mortgage companies. Countrywide fell 71 cents to $16.50 at 11:58 a.m., after falling as far as $16.35. The stock has declined about 61 percent this year. www.bloomberg.com/apps/news?pid=20601087&sid=afnxbVXg0xH8&refer=home
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Post by jeffolie on Sept 11, 2007 11:49:38 GMT -6
Forbes was touting "Bank of America knows when it's time to buy" but I questioned the bailout hypothesis in Countrywide Bailed Out by Bank of America? Things look a little different today, don't they? Countrywide (CFC) soared as high as $26 on news of the "bailout". It's now trading under $17. Not only that, Countrywide allegedly needs another cash infusion. So what's it going to do? Offer options on another 16-17% of the company for another $2 billion. If so, the Bank of America (BAC) might not exactly be happy any longer with the terms it received. And what if that cash infusion does not work? Will a third deal be needed? Hmmm. Let's see. 16.5+16.5+16.5 = 49.5. Well I suppose Countrywide could fit in a third deal to give away shares for cash infusions and still marginally be the majority shareholder of itself, but the speed at which infusions are needed seem to be rather ominous. Then again, maybe Countrywide is banking on its share price not being over $18 at the time the options expire. In that case Countrywide would retain full ownership of itself. Assuming of course it is still in business. If Countrywide really needs $2 billion cash infusions every month or even every third month, it won't be. globaleconomicanalysis.blogspot.com/2007/09/countrywide-seeks-another-cash-infusion.html
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Post by jeffolie on Sept 12, 2007 15:11:41 GMT -6
Employees Sue Countrywide, Alleging Loss of Millions of Dollars in 401k Plan
Some Countrywide Financial Corp. employees sued the mortgage lender Wednesday, claiming they suffered heavy losses in their 401k retirement accounts after the company failed to warn them about the depth of its financial troubles.
The lawsuit, filed in U.S. District Court in Santa Ana, seeks class-action status and names as defendants Countrywide Chairman and Chief Executive Angelo Mozilo and benefits committee members in charge of the retirement plan, according to attorney Steve Berman, who is representing the plaintiffs.
He said employees decided how much of their salary to set aside in their retirement plan based in large part on their understanding of the company's financial health.
But those overseeing the plan failed to warn workers or intentionally concealed key information, the lawsuit claims.
"Most of these employees weren't risk-takers, rather claims processors and line staff who go to work every morning, putting a little away every month for retirement, or to finance a child's education," Berman said in a statement.
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Post by unlawflcombatnt on Sept 12, 2007 19:48:05 GMT -6
Employees Sue Countrywide, Alleging Loss of Millions of Dollars in 401k Plan. Some Countrywide Financial Corp. employees sued the mortgage lender Wednesday, claiming they suffered heavy losses in their 401k retirement accounts after the company failed to warn them about the depth of its financial troubles. If I was one of Countrywide's employees, I'd withdraw from the 401K if I had the option. Better to lose just part of the money to taxes and penalties, rather than lose ALL of it when Countrywide goes bankrupt.
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