Countrywide Foreclosure Rate
Rises Sharply From Year Before
by Donna Kardos
From The Wall Street Journal Online
March 14, 2008
Countrywide Financial Corp. saw its foreclosure rate continue to climb as its loan delinquency rate rose 66% in February from a year earlier, though it dipped slightly from January.
The mortgage lender's delinquencies increased to 7.44% of unpaid principal balances from 4.48% a year earlier, though down slightly from 7.47% in January. The month-to-month dip pales in comparison to the 0.27-percentage-point increase recorded in January over December.
Foreclosures as a percentage of unpaid principal balance climbed to 1.64% in February from 0.8% a year earlier and 1.48% in January.
The company funded $25.6 billion in loans last month, down 26% on the year but up from 17% from January. The latest result included no nonprime fundings and a 77% drop in home-equity loans and lines of credit.
Average daily applications slid $1.9 billion, down 36% from the prior year and 27% from a month earlier.
Countrywide Chief Executive Angelo Mozilo has been under after not apologizing for his company's performance or the problems that threaten to put hundreds of thousands of American families out of their homes at a hearing last week of the House Committee on Oversight and Government Reform. Instead, he repeatedly defended the company that he co-founded nearly 40 years ago and shifted the blame to unexpected turmoil in the credit markets and falling home prices.
Meanwhile, the Federal Bureau of Investigation is reportedly investigating the company for possible securities fraud, probing whether company officials made misrepresentations about Countrywide's financial position and the quality of its mortgage loans in securities filings. Numerous other lenders also are under scrutiny by federal agents and prosecutors in a broad look at the subprime industry sparked by huge losses on residential mortgages and the securities used to fund them.
Countrywide, which agreed in January to be acquired by Bank of America Corp. for $4 billion, already is under investigation by the Securities and Exchange Commission for possibly improper accounting, and is the subject of a class-action securities-fraud civil lawsuit by various government pension funds and their managers, including the city and state of New York. The suit alleges that Countrywide misled investors and misclassified many of the loans it made to low-quality borrowers.
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