In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Friday, October 26, 2007

Countrywide reports $1.2 billion loss

by Calculated Risk on 10/26/2007 09:13:00 AM

From MarketWatch: Countrywide reports $1.2 billion loss

... mortgage lender Countrywide Financial Corp. reported Friday its first quarterly loss in 25 years ...

The Company ... said it has also negotiated $18 billion in additional liquidity that it characterized as "highly reliable." Countrywide also said it expects to turn a profit in the fourth quarter and in 2008. ...

Its mortgage-banking business suffered a $1.3 billion loss in the latest quarter.
"We view the third quarter of 2007 as an earnings trough, and anticipate that the company will be profitable in the fourth quarter and in 2008," Sambol said.

Countrywide said it took losses and write-downs of about $1 billion on non-agency loans and mortgage-backed securities. Moreover, The company increased its loan-loss provisions on its held-for-investment portfolio to $934 million, up from $293 million in the second quarter.

The lender also raised its estimates of future defaults and charge-offs due to a worsening housing market, higher delinquencies and tighter credit. Countrywide plans to cut between 10,000 and 12,000 workers by the end of the year as a result of plunging origination volume.
The company said it expects the housing market to continue to weaken in the near term, and unless interest rates head lower, it sees lower mortgage originations through 2008.