Countrywide, Largest U.S. Mortgage Lender, Under Pressure
When it comes to the U.S. in terms of mortgage lending, no one beats Countrywide. It is the largest lender. Indeed, it was also the largest subprime mortgage lender. And that meant that the subprime lending crash hit the company hard. Citibank and other financial sector companies have been bailed out be cash infusions, but Countrywide is still waiting.
Bloomberg reports that Countrywide will see more pressure — not less — as this new year progresses:
“It appears that the housing trends in 2008 will look a lot like 2007, so Countrywide will remain under a lot of stress,” said Tom Atteberry, a money manager in Los Angeles at First Pacific Advisors LLC, in an interview yesterday. “What they are left with is a pretty low-margin business.”
Indeed, rumors began floating recently that Countrywide plans to file for bankruptcy. Countrywide is combating these rumors fiercely. The mortgage lender insists that bankruptcy is not in its immediate future, even at it reports that last months foreclosures and late payments rose to the highest level in more than five years.
CNN Money reports on the rise in foreclosures for the third quarter of 2007:
The Mortgage Bankers Association reported that 0.78 percent of mortgages entered the foreclosure process in the three months ended Sept. 30. That figure is up from 0.65 percent in the second quarter - the previous record high - and more than double the 0.32 percent rate a year earlier.
December was even worse. And, as the economy slows, possibly moving into a recession, concerns of further problems are likely to surface. After all, economic difficulties will hit consumers, making it more difficult to make payments.
Mortgage lending is facing serious problems right now, with reluctance to grant home mortgage loans apparent by many providers. Additionally, consumers are wary. The subprime mortgage market appears to be in retreat as well — almost completely disappearing.
Tags: mortgage blog, mortgage lending, home mortgage loan, U.S. mortgage lender,
subprime mortgage market, Countrywide bankruptcy, Citibank bailout
