More Bad News For Countrywide
by Stewart Douglas
Story link: More Bad News For Countrywide
Troubled US mortgage lender Countrywide Financial has today announced that its loan volumes had fallen by 44% over the course of December, which could see the bank face even more liquidity problems over the course of 2008 and sent share prices plummeting for the second consecutive day.
The number of mortgages offered over the course of December was $23.4 billion, down from some $41.7 billion a year previous, reflecting the extent of the slowdown in the retail housing sector throughout the US over the course of the last twelve months, particularly since the sub-prime collapse which has seen even further problems for lenders.
The news comes just 24 hours following rumours that the lender was on the verge of bankruptcy, which was fiercely denied by the bank but nevertheless saw millions wiped off the value of its publicly traded equity over a short period of time.
However the bank itself suggests that it is heading in the right direction, and is making progress despite losing 8% on share value today after a 28%
reduction through yesterday following the high profile rumours about its medium term liquidity situation.
The figures today also revealed a growth in the number of foreclosures over the month of December from November, as well as the expected dramatic increase from the same period a year earlier, before the credit problems began to take effect to the same scale as a present, and before the sub-prime sector collapse of the summer months.
Likewise the number of missed mortgage payments was also up by nearly double over the period, again reflecting the underlying problems plaguing the mortgage markets that look set to cause problems for lenders like Countrywide Financial for the foreseeable future.
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