Countrywide: downgrade could be crushing

Discussion in 'Wall St. News' started by THE-BEAKER, Nov 13, 2007.

  1. goodbye countrywide.

    more evidence that this compnay is finished.

    no access to funds means no business model.

    still short awaiting purchases from anyone at countrywide.

    as of yet none.

    Mortgage lender says that a credit downgrade would severely impact its ability to raise money.

    LOS ANGELES (AP) -- Countrywide's ability to raise money and increase deposits in its banking subsidiary could be hampered if its credit ratings were downgraded below investment grade, the mortgage lender said in a regulatory filing.

    Countrywide (Charts, Fortune 500), the nation's largest mortgage lender, said further reductions to its credit ratings would severely limit its ability to access public debt markets, according to a quarterly report filed late Friday with the Securities and Exchange Commission.

    In addition, as much as $5.5 billion in deposits at Countrywide Bank could be "subject to placement with another bank" if its ratings were cut further, the company said.

    As of Nov. 7, the three major credit agencies - Standard & Poor's, Moody's Investors Service (Charts) and Fitch Ratings - had placed the company on some form of negative outlook, according to the filing.

    The company said it took steps to boost its access to funds, including $9.2 billion in cash by the end of the third quarter.

    Calabasas, Calif.-based Countrywide issued the latest disclosures as part of an expanded account of third-quarter financial results.

    Last month, the company reported a loss of $1.2 billion during the quarter ended Sept. 30 - its first quarterly loss in 25 years.

    Management said then that Countrywide was expected to post a profitable fourth quarter and 2008.

    In the filing, however, the company reiterated a down outlook into next year, projecting its U.S. loan origination volume will plummet 30 percent in 2008 compared to this year.

    Mortgage market woes have forced the company to set aside millions in loan-loss provisions and writedowns, and the lender originated fewer loans.

    Subprime bailouts: Chump check
    In the latest filing, the company said some 5.8 percent of the loans in its servicing portfolio were behind in payments by 30 to 90 days as of Sept. 30, up from 4.5 percent in the year-ago quarter.

    About 23.9 percent of its subprime loans made to borrowers with shaky credit histories were delinquent, up from 16.9 percent, the company said.

    The rate of delinquency among prime home equity loans also increased, with 4.6 percent of those loans delinquent, compared to 2.1 percent in the year-ago quarter.

    In all, 0.92 percent of the loans in the company's servicing portfolio at the end of the quarter were pending foreclosure, up from 0.52 percent in the third quarter of 2006.

    Meanwhile, Countrywide said in the filing that the decline in demand for mortgage-backed securities amid the credit crisis that rocked financial markets during the summer has forced it to find other ways to estimate the value of its portfolio of loans held for sale.

    The portfolio of loans held for sale was valued at $12.3 billion and represented some 60 percent of mortgages, including nonconforming adjustable-rate mortgages and home equity loans, originated or purchased for resale as of Sept. 30.

    The lender typically calculates the fair value of the portfolio based on market prices for securities backed by similar loans.

    E*Trade shares sink on downgrade

    Hats off to banks charging foreclosure fees!
  2. et123


    It appears the content of this filing is starkly different than the rosy outlook the company projected during its conference call at last earnings report....

    pretty blatant [...fill in the blank...] in retrospect...
  3. Sisss, transferring credibility to yourself again.

    And disregarding WHERE the paper's going. There's ALWAYS someone on the other side of the trade.

    All lending institutions have percentage of delinquency. IF they don't, they're not making enough loans. The essence of model. Sub-standard, doubtful, and loss. 5.8% is hardly scathing.

    Countrywide Bank is a small element of the overall picture.

    There is always a demand for housing and in turn funding. Tangible, albeit location dependent, marketable collateral. IF instead bundled and sold, POOF, completly liquid. I'd rather be in originations than a local mom & pop homebuilde (irrespective of the blend of specs to pre-solds). recognition to boot.
  4. good riddance. Their incompetence there could only be matched by a govt agency like FEMA. I just got a mailer for a 40 year mortgage, I am waiting for an 80 year mortgage. I want my grandchildren to pay it off, fu**in losers!!:mad:
  5. Credit crunch and financial crisis has more to play out. Many more surprises to come.
    Builders aren't building.
    Mortgage co's aren't writing mortgages.
    More downside to come for this sector.
    CFC will make new lows shortly.
    Short 1500@14.25
  6. lol the stock and the market is up
  7. Yep, more surprises to come. For example a CFC specialist, flush with inventory bought wholesale, gets himself an alibi in the form of some pithy news item, gaps it 3 points then runs it retail another 6 or 7 points that day thus shutting your "mouth" temporaily. You know what I mean?

    Sure you do.

    Then again, maybe you don't. You still can't make the distinction between a negoitable paper financial instrument and an operation, which itself can be quite nimble.

    Builders aren't building? Wanna bet?

    You should be a little more reserved about using strong words such as "crisis".

    Flyfisher? More like Chicken Little. Or is it the boy that cried woof?
  8. A 16 year well entrenched trendline suggests it won't break $10.

    That sharp of a vertical move down from the top to the present suggests the ax is a large player. Bargain hunters don't come in that quick (and stay). As they leave, he re-accumulates. Compounded.

    What does an ax do WITH newfound inventory? Less than a year is Newfoundland.

    When you get whacked, you won't be anywhere to be found (temporarily), will ya Fly boy?

    Bang out those dimes. Then tell the world about it. Does wonders for low self-esteem, eh?
    • cfc.jpg
      File size:
      66.3 KB
  9. lol
    Sold Short 1500@14.25
    Covered 1500@13.17
  10. CFC has a rock solid business

    as a long term hold this will go to 60 again
    #10     Nov 13, 2007