Today's news on Countrywide Home Loans brought back flash backs of the American Home Mortgage Crash...

Shares of Countrywide Financial (NYSE: CFC) plunged today on reports that the company was nearing bankruptcy. The stock has recovered somewhat since the company put out a statement saying that "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."

 

This all sounds  like the same rumors and denials that AHM had floating around and within a few days of their rumors and denials AHM crashed and burned..

I for one hope that Countrywide Home Loans can manage to stay a float since we have a great working relationship with them but it's pretty scary how similar the news is.

Read more @ http://www.bloggingstocks.com/2008/01/08/countrywide-financial-forged-documents-in-pennsylvania-bankruptc/

 

 

 

 

 

 

 

 

 

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12 Comments on Countrywide Home Loans - Sailing or Sinking?

JAN
08
2008
425,154 Points Outside Blog
I would not be surprised but they only have so much working capital and really no idea of their exposure.  I would not want to be employed by them right now.
10:27pm • #1
1 Featured Post Localism Sponsor
Well, I happen to be a very happy and satisfied customer, so I pray they can make it through. 
10:30pm • #2
138,190 Points 2 Featured Posts

From Bloomberg: Countrywide Loses Most Since 1987 on Bankruptcy Bets

Countrywide Financial Corp. dropped the most in two decades on the New York Stock Exchange amid speculation the largest U.S. mortgage lender will file for bankruptcy.
...
``There's some sort of rumor that they would go under, but it's purely a rumor,'' said Thomas Garcia, head of trading at Thornburg Investment Management, which oversees about $50 billion in Santa Fe, New Mexico.
From Reuters: Countrywide Financial denies bankruptcy 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.
10:38pm • #3

Leo:  It could be only a matter of time.  When there's blood in the water, there's trouble.  I'm not sure Countrywide has either the liquidity or the borrowing power to survive.  The other larger financial institutions (think Citigroup, UBS, Merrill Lynch) can borrow money against their assets.  Countrywide is tapped out.  I'm not sure even we would lend them money at this point. We'll see what happens.  At some point, BofA may get one heckuva buy. The next 30 days or so could be very telling.  Have a nice night.

 

Paul
Paul McFadden
11:18pm • #4
JAN
09
2008

CW's strength may also be its weakness - that gazillion dollar portfolio can be very profitable, but with defaults at ridiculous levels, just how profitable is it currently? A failing CW is an extremely bad thing for the industry. I know there are plenty who would do a jig if CW went out, but overall the effects would be devastating and would likely lead to swift government oversight.

1 massive loss in 25 years typically won't kill a company - Q4 results are to be released in late January - could it be that traders are bashing the stock in anticipation of a good earnings report, setting themselves up for a hefty profit? It would be interesting to see who is buying big blocks of stock right now.

 
KEMSHTN
12:50am • #5
Hello folks   -  given that I am employed by Countrywide, it is unsettling.   I love this company and its philosophies, but it does rattle the nerves and makes it difficult to keep my brokers confident in a market where there are fewer loans to go around.   Hence, I am on AR at 5 a.m.!!!    Will be interesting to see what today brings.    Kemshtn, you make an interesting point.... let's hope there is some merit to it.
4:12am • #6
Leo.  I think CW may be a takeover target.  Someone like Wachovia or B of A could come in and get a pretty good bargain, especially at these valuations.  Like you said, this is a huge player in the mortgage game and it would do some serious damage to our economic psyche if they implode.
9:40am • #7
158,751 Points 2 Featured Posts Outside Blog

I see all the same signs that where there when AHM went belly up, I know a bunch of people who worked at AHM here in CT went to Countrywide and if this happens again to them it can be devastating. I worked at AHN for about 3-1/2 yrs and loved the company but am glad I was not caught up when the-ship sunk and people were left without getting their loans funded, I acn't imagine that happening to those LO's again with another company, that does not go over well with referral partners.
9:50am • #8
134,237 Points 5 Featured Posts

Leo,

I agree, I do not want to see Countrywide fail, since they are a correspondent lender, however the rumors flying are pretty scary. 

12:42pm • #9
JAN
10
2008
I, for one, wish they would go bankrupt.  We were in a bankruptcy ourselves and the trustee and our attorney have filed a class action lawsuit because for a whole year they were not applying our payments to our mortgage.  They are the worst company to deal with and should not be in the business.  I hope they start applying our payments soon, our mortgage isn't being paid like it should.
A dissatisfied customer
4:18pm • #10
JAN
11
2008
I guess the news of today with B or A buying CW should change a lot of peoples' minds.
2:55pm • #11
Well, I guess now we know why CW stock was $5.00 a share recently.
6:53pm • #12


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