Countrywide Financial Corporation’s Foreclosure Numbers Rising

March 20th, 2008 · No Comments

Countrywide Financial Corporation (NYSE:CFC) is a service holding company dealing with many facets of financial marketing and services. Mainly it is engaged in residential mortgage banking and businesses related to it. It has a wide network of global operations. Mortgage loans are given through many channels across the nation. The mortgage loans are sold to the secondary market in the form of mortgage backed securities. In 2006 about 45% of these mortgages were non-conforming loans – loans that were too large to sell to Fannie Mae. The company deals with the services that follow up the loans and also provides loan closing services like title, appraisal and escrow. The mortgage banking section comprises of three separate divisions related to loan production, servicing and closing

It is reported that the mortgage giant, Countrywide, based in Calabasas, having about 9 million mortgages has registered more foreclosures last month. Last February the number was 0.8% but in 2008 February the number has shot up to 1.64%. In January the rate was 1.48%. The delinquency rate – that is those 90 days behind payment – went up from 4.48% in January in the previous year to 7.47% in January 2008.

Countrywide sanctioned $25.6 billion as loans in February. This is in sharp contrast to $34.6 billion granted in February 2008. In January $21.9 billion loans were given.

According to reports issued by Countrywide one third of its sub-prime mortgages were delinquent by the end of 2007. In the fourth quarter of that year the company lost $422 million.

Bank of America Corporation (NYSE:BAC) is buying off Countrywide. Once the deal is completed BofA will be the biggest mortgage lender as well as loan servicer in USA. It is anticipated that formalities will be completed by the end of the third quarter this year. Kenneth Lewis, chief executive officer of Bofa commented that Countrywide had been diligent to banking norms as studied from its financial figures. The price of purchase agreed upon is $4 billion

Last month Countrywide in conjunction with Association of Community Organizations for Reform Now (ACORN) have started an operation to help foreclosure victims to tide over the crisis. Previously Countrywide had sanctioned $16 billion for refinancing. Now it has increased that quota. Those borrowers will be helped who have favourable payment records but are now lagging behind because of rise in interest. Other choices will also be offered to borrowers in various stages of foreclosure.