Does 1.04% REALLY matter
January 9th, 2008 Categories: Real Estate News, San Diego county Real Estate News
(CFC)Countrywide home loan delinquencies rise read one of many headlines this morning and their stock got hammered. Since Monday, it is down about 45% currently trading at $4.90 from an all time high of just under $40, with a 2 for 1 split in August 2004. OUCH!!!
As I read the article they stated that loan revenue was up for the fourth quarter which is good news, but that yes foreclosures were up just over a third. The natural first reaction is ‘this has got to be bad, just look at the hit the stock took’, however the number was a miniscule .65% to 1.04. Yes, 98.96% of there loans are still viable. That a darn big number
See Countrywide is the largest mortgage lender in the nation. How are they doing in the current slump? Well in December alone they funded $24 billion in loans in December bringing their fourth quarter total to $69 billion. That’s not a bad book of business considering all the upheaval in the market in particular the mortgage industry.
Additionally there is all the talk of a possible bankruptcy filing. This isn’t the first time the BK talk has swirled around Countrywide. As reported by the New York Times blog as early as August 26, 2007, “a move that came amid speculation that Countrywide’s survival was in question and that it had become a takeover target — notions that Countrywide publicly disputed.” Just what is that ‘move’ I have highlighted? That would be Bank of America buying 2 billion dollars of Countrywide preferred stock, non-voting, that 
could be converted to common shares at $18/share. This is the equivalent to a 16% stake at the time. Brilliant move or… YOU’RE FIRED!!?
The official line regarding these new rumors(?),
“There is no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company,” Countrywide said in a statement, according to Reuters.-January 8, 2008 5:35 PM ET
Lastly, Countrywide Banking still has assets of $113 billion and is offering great rates on CD’s and saving accounts. Currently they are offering 5.45% 
on a 6 month CD with a $10k balance while the national average is 4.2%.
Here is another example of how the media, and not digging deep enough, does not always paint the most accurate picture; Mortgage application volume skyrockets is the headline of another article written this morning. Why isn’t that front page news?
