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| 2007/7/24-26 [Reference/RealEstate] UID:47413 Activity:low |
7/24 It might blow up, but it won't go pop
It might blow up, but it won't go pop
IT MIGHT BLOW UP, BUT IT WON'T GO - *BANG*
http://www.latimes.com/business/la-fi-countrywide25jul25,0,5439657.story?coll=la-home-center
\_ Whoa, time to panic, Countrywide only had $485 million in profit!
Run for the hills!
\_ So, your response is "La, la, la, la! I can't hear you!" ?
\_ What response should there be to half a billion dollars in
profit for a mortgage company? -tom
\_ Ummm, I think "the husing market is so screwed it's messing
up even secure finance" is important. You don't?
\_ How is a $485 million profit "messed up"? -tom
\_ Profit is evil. We must all share the good and the
bad as a society. Think of the children, you brute!
\_ The 66% drop in earnings isn't a big deal?
\_ No, not really. The industry clearly has
slowed down, which was anticipated by everyone,
including Countrywide. They're still making
gobs of money. They might make smaller gobs
of money in the future. They might even lose
some money. So what? This is a company with
an $18B market cap and $200B in assets. They
are not going away due to a few mortgage
defaults. -tom
\_ link:www.mercurynews.com/ci_6452404
Foreclosurse notices at 11-year high in CA
\_ yes, and? It's a cyclical industry on
a down cycle. -tom |
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| www.latimes.com/business/la-fi-countrywide25jul25,0,5439657.story?coll=la-home-center Largest Text Size Largest Text Size Change text size Countrywide feels pain of ailing mortgage market CEO reports that even 'prime' borrowers are having more trouble making payments. helped trigger a Wall Street sell-off Tuesday when it said that a growing number of customers once considered to be good credit risks were having trouble making their mortgage payments. Until recently, such problems had been almost exclusively limited to the so-called sub-prime market, for borrowers with flawed credit records and high-cost mortgages. But Countrywide, the nation's biggest home loan company, reported Tuesday that it was seeing more of its good-credit "prime" borrowers do the same. "The spillover into prime, I don't think, is something that should shock anybody," Angelo Mozilo, Countrywide's chief executive, said in a three-hour conference call with investors and analysts to report second-quarter earnings. The Calabasas-based company said payments were at least 30 days late at the end of the second quarter on 34% of prime first mortgages, up from 21% a year earlier. The delinquency rate was worse among borrowers of prime home-equity loans -- second mortgages -- who missed payments at a rate of 46%. Sub-prime delinquencies also worsened sharply in the quarter, Countrywide said. Mozilo said many of the prime borrowers facing delinquency had used home-equity loans on top of regular first mortgages when purchasing their homes to put together enough money for a down payment and avoid the added expense of private mortgage insurance. Countrywide reported that the corrosion of its loan portfolio cut into sales and profit. "Probably the most disheartening thing about Countrywide's results was the extent to which its weak performance in the second quarter reflected deterioration in prime home-equity loans, rather than exclusively sub-prime credit," said Kathy Shanley, a senior investment grade analyst at Gimme Credit, a New York-based corporate bond research firm. The results widely missed analysts' estimates, according to Thomson Financial. The company also slashed its full-year 2007 outlook for the second time, citing an "increasingly challenging" housing market. So far this year, Countrywide shares have fallen more than 28%. Mozilo held out little hope that the company's fortunes and mortgage business would improve soon. "It just takes a long time to turn a battleship around," Mozilo said. "This is a huge battleship, and we're headed in the wrong direction." He said the inventory of unsold homes had to decrease and the slide in home prices had to stop before the nation's housing market saw any signs of recovery -- a process he predicted would take another 18 months. Calling it "a gut feeling," Mozilo said it would take until 2009 before the market started to head "into another direction." "We expect difficult housing and mortgage market conditions to persist," Mozilo said. |