Countrywide Delinquencies Skyrocket…and the Worst is Yet to Come
By Brett Weiss, Maryland Bankruptcy Attorney on Oct 29, 2007 in Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Consumer Protection, Foreclosure Issues, General Bankruptcy Information, Maryland, Mortgages, Personal Finance, Predatory Lending
According to a Countrywide press release issued on October 26, 2007, things aren’t looking so rosy for the country’s largest mortgage lender. The figures tell the story:
COUNTRYWIDE FINANCIAL CORPORATION
LOAN SERVICING SECTOR
SERVICING PORTFOLIO DELINQUENCIES
(Unaudited)
Servicing Portfolio
Delinquencies (1) Quarters Ended
September 30, June 30, September 30,
2007 2007 2006
Total 90+ day Total 90+ day Total 90+ day
Conventional 1st liens 4.41% 1.44% 3.35% 1.02% 2.57% 0.56%
Government 1st liens 13.50% 4.72% 12.39% 4.39% 13.42% 4.78%
Prime home equity loans
(including FRS) 5.76% 2.70% 4.56% 2.15% 2.52% 0.98%
Subprime loans 29.08% 12.63% 23.71% 9.45% 18.32% 6.19%
Total servicing portfolio 7.12% 2.67% 5.73% 2.02% 4.55% 1.31%
Pay particular attention to the numbers under “subprime loans:” 29.08%–almost thirty percent–of Countrywide’s subprime mortgages are currently in default. This means that of its approximately $116.3 billion in subprime loans, nearly $34 billion are in default, an increase of about 8% from 3 months ago, and up 63% from a year ago.
And things are just getting worse. Countrywide expects over $16 billions in adjustable rate loans to increase significantly during 2008.
So what did the market do when this dreadful news was announced? Why Countrywide shares jumped by 25%.
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