Countrywide's Delinquencies Jump
As Economy Hammers Borrowers
by Andrew Edwards and John Flowers
From The Wall Street Journal Online
February 18, 2008
Countrywide Financial Corp.'s January loan delinquency rate continued to climb last month as falling home values and the sagging economy hammered borrowers.
The nation's largest mortgage lender's delinquencies rose to 7.47% of unpaid principal balances from 4.32% a year earlier and 7.2% in December. The month-to-month increase is much less than that made from November to December.
On loans it services, the foreclosure rate edged up to 1.48% last month from 1.44% in December. In January 2007 the rate was 0.77%.
Countrywide funded $21.89 billion in loans in January, compared with $23.55 billion in December and $37.11 billion a year earlier. That included no nonprime fundings and a 76% plunge in home-equity loans and lines of credit.
Average daily applications fell 6.4% year-over-year to $2.62 billion.
Countrywide is in the process of being acquired by Bank of America Corp. in an approximately $4 billion all-stock deal, but there are still several hurdles to leap before it goes through. Hedge Fund SRM Global Master Fund LP, which has a 5.48% stake, has said it will vote against the deal because it "considerably" undervalues the company.
In a letter to Countrywide's board Wednesday, SRM criticized Countrywide's management for being "engaged in a rushed process to sell itself and failed to conduct that process in a sufficiently considered and diligent manner."
Countrywide has said the deal is fair for both parties.
-- Denise Jia contributed to this article.
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