And there goes Countrywide....

[Slew Foot]

I know we all mocked Dave for saying they would go bankrupt, even me included, but hey a blind squirrel finds a nut eventually. Not they're going soon, but that looks like the trend. On another note, my puts in them are doing splendidly.



"Shares of Countrywide Financial Corp. (NYSE:CFC - News) fell 19.5 percent to $19.69 on the rumors and ranked among the biggest percentage losers on the New York Stock Exchange. Countrywide officials were not immediately available for comment.

Earlier, Merrill Lynch downgraded the No. 1 U.S. mortgage lender to sell, saying the mortgage lender could face bankruptcy if liquidity worsens."

 

[StageLeft]

My mortgage is through them. If htey go belly up, is the note terminated? I know the answer is no

 

[CPA]

Originally posted by: Skoorb
My mortgage is through them. If htey go belly up, is the note terminated? I know the answer is no

Your note would probably be sold off.


And what type of bankruptcy are we talking here: liquidation or reorganization?

 

[Lemon law]

CPA asks the no brainer---And what type of bankruptcy are we talking here: liquidation or reorganization?

Taxpayer bailout is always the answer when government policy backfires. Hair of the dog that bit you hangover cure. Sell the assets to a connected crony for pennies on the dollar and let the taxpayer eat the debts.

 

[dmcowen674]

Originally posted by: Slew Foot
I know we all mocked Dave for saying they would go bankrupt, even me included, but hey a blind squirrel finds a nut eventually.

Not they're going soon, but that looks like the trend.

On another note, my puts in them are doing splendidly.


"Shares of Countrywide Financial Corp. (NYSE:CFC - News) fell 19.5 percent to $19.69 on the rumors and ranked among the biggest percentage losers on the New York Stock Exchange. Countrywide officials were not immediately available for comment.

Earlier, Merrill Lynch downgraded the No. 1 U.S. mortgage lender to sell, saying the mortgage lender could face bankruptcy if liquidity worsens."

That's a blind moron squirrel.

 

[dullard]

Originally posted by: Lemon law
Taxpayer bailout is always the answer when government policy backfires. Hair of the dog that bit you hangover cure. Sell the assets to a connected crony for pennies on the dollar and let the taxpayer eat the debts.

Can you please tell me how taxpayers are eating Skoorbs mortgage?

 

[Kwaipie]

I'm closing on a new house in 3 weeks. Countrywide is my lender. *gulp*

 

[LegendKiller]

a sell rating does not mean a bankruptcy. they still have over 11bn in 4yr revolving unsecured credit and another 150bn in secured lines. they also have billions in deposits. if cfc goes down, we have a lot more to worry about.

 

[Ricochet]

Isn't this just over reaction by fearful investors? If Countrywide isn't dependent on subprime mortgage payments, I don't see why they should be in this much trouble.

 

[yllus]

Originally posted by: Lemon law
CPA asks the no brainer---And what type of bankruptcy are we talking here: liquidation or reorganization?

Taxpayer bailout is always the answer when government policy backfires. Hair of the dog that bit you hangover cure. Sell the assets to a connected crony for pennies on the dollar and let the taxpayer eat the debts.

?? I'm hardly the most knowledgable person in this area, but what you said made zero sense AFAIK.

 

[Lemon law]

Originally posted by: dullard

Originally posted by: Lemon law
Taxpayer bailout is always the answer when government policy backfires. Hair of the dog that bit you hangover cure. Sell the assets to a connected crony for pennies on the dollar and let the taxpayer eat the debts.

Can you please tell me how taxpayers are eating Skoorbs mortgage?

Dullard is dull---anyone can tell skoorb is an asset---what part of sell the assets to a well connected crony don't you understand? And depending on the clauses in skoorb's mortgage,
the new asset holder may decide to increase interests rates because the taxpayer is getting the shaft. Or the new asset holder may choose to sell Skoorb's mortgage to the Snidley Whiplash Company who may try illegals stunts. They may get stopped in the end but cause grief for a while.

But we all hope it makes no difference for skoorb. The point being, the taxpayer still gets the shaft if it comes down to a taxpayer bailout. While getting zero benefits from the assets.

 

[Jhhnn]

a sell rating does not mean a bankruptcy. they still have over 11bn in 4yr revolving unsecured credit and another 150bn in secured lines. they also have billions in deposits. if cfc goes down, we have a lot more to worry about.

"Secured lines" means what? Mortgage backed securities?

Which is the basis of the whole problem...

Without the whole sub prime "we'll lend money to anybody" structure to prop up prices, or some other contrived mechanism, housing prices are simply too high and the pool of qualified buyers too small to maintain the status quo. Investors have finally figured that out, and simply refuse to buy MBS's, which outfits like Countrywide must sell in order to maintain liquidity, stay in business...

We'll start to see a whole lot of flimflammery designed to bring the govt and the taxpayers in to "save the homeowners" when that's not what it's about- it's about saving the big guys from taking their lumps...

Anybody who recently paid too much on one of the creative financing deals is already screwed, particularly if their mortgage resets any time soon, most definitely if they have to re-qualify... People who paid too much but can support the payments are simply stuck paying too much in their present abode until they can get rightside up on equity... which might take more than a couple of years, bet on it...

 

[WHAMPOM]

Originally posted by: Skoorb
My mortgage is through them. If htey go belly up, is the note terminated? I know the answer is no

They will sell your mortgage to a new holder and raise your payment rate.

 

[Slew Foot]

Originally posted by: ricochet
Isn't this just over reaction by fearful investors? If Countrywide isn't dependent on subprime mortgage payments, I don't see why they should be in this much trouble.

Neither was American Home Mortgage and they went under a week or so ago.

 

[Whoozyerdaddy]

FWIW... An e-mail I got tonight from our CW rep...

To Our Valued Business Partners,

It is hard to avoid bad news about the mortgage industry. Increased default rates, especially on sub-prime loans and high LTV loans have caused purchasers of mortgage-backed securities to demand higher returns and in some cases, leave the market entirely. Faced with the inability to sell their loans, some lenders have experienced liquidity issues and were forced to cease loan origination operations. Other lenders are eliminating products and increasing pricing.

We are seeing a flight to quality in both credit and product offering, and a real back-to-basics approach regarding mortgage underwriting. As you know probably better than anyone, these events, coupled with reduced housing starts and declining home values in some markets are making your business more challenging.

I want to let you know that while this industry turmoil may continue for some time, Countrywide is the safest, best place for your customers. Countrywide is America's number one mortgage lender and has been here to serve the needs of people just like you for nearly 40 years. We will continue to be here and help your business grow and thrive. Our industry-leading strengths include:

Corporate net worth of nearly $15 billion
More than $180 billion in net available liquidity (as of June 30 and documented in an Aug. 3 regulatory filing)
Two of the most important credit rating agencies, Moody's and S&P, reaffirmed their A ratings and stable outlook for Countrywide this week.
While numerous other lenders have shut their doors entirely this year, we have:
delivered more than $900 million in net earnings during the first half of 2007
continued to acquire valuable assets from other companies, most recently seen in our agreement this week to purchase Homebanc's five best mortgage branches
We've gone from being ranked #264 in the Fortune 500 in 2001, to #91 in the most rent rankings. In those same rankings Countrywide was noted as the 70th most profitable company among the Fortune 500.

While I know this is a difficult time for you and others in our industry know that I am here, backed by the power of Countrywide, to help your customers meet their mortgage lending needs.

Sincerely,

He might be puffing... or it could be that as the mortgage sector takes a dive, CW, being the largest in the group, would naturally take a hit. I personally think that's the case. The sector is taking a beating and CW is the big kid on the block. I think they're going to be fine.

 

[PottedMeat]

I hope the first thing they do is take those goddamn commercials off the air.

 

[dmcowen674]

Originally posted by: Whoozyerdaddy
FWIW... An e-mail I got tonight from our CW rep...

To Our Valued Business Partners,

It is hard to avoid bad news about the mortgage industry. Increased default rates, especially on sub-prime loans and high LTV loans have caused purchasers of mortgage-backed securities to demand higher returns and in some cases, leave the market entirely. Faced with the inability to sell their loans, some lenders have experienced liquidity issues and were forced to cease loan origination operations. Other lenders are eliminating products and increasing pricing.

We are seeing a flight to quality in both credit and product offering, and a real back-to-basics approach regarding mortgage underwriting. As you know probably better than anyone, these events, coupled with reduced housing starts and declining home values in some markets are making your business more challenging.

I want to let you know that while this industry turmoil may continue for some time, Countrywide is the safest, best place for your customers. Countrywide is America's number one mortgage lender and has been here to serve the needs of people just like you for nearly 40 years. We will continue to be here and help your business grow and thrive. Our industry-leading strengths include:

Corporate net worth of nearly $15 billion
More than $180 billion in net available liquidity (as of June 30 and documented in an Aug. 3 regulatory filing)
Two of the most important credit rating agencies, Moody's and S&P, reaffirmed their A ratings and stable outlook for Countrywide this week.
While numerous other lenders have shut their doors entirely this year, we have:
delivered more than $900 million in net earnings during the first half of 2007
continued to acquire valuable assets from other companies, most recently seen in our agreement this week to purchase Homebanc's five best mortgage branches
We've gone from being ranked #264 in the Fortune 500 in 2001, to #91 in the most rent rankings. In those same rankings Countrywide was noted as the 70th most profitable company among the Fortune 500.

While I know this is a difficult time for you and others in our industry know that I am here, backed by the power of Countrywide, to help your customers meet their mortgage lending needs.

Sincerely,

He might be puffing... or it could be that as the mortgage sector takes a dive, CW, being the largest in the group, would naturally take a hit. I personally think that's the case. The sector is taking a beating and CW is the big kid on the block. I think they're going to be fine.

I didn't know they got Homebanc.

They didn't get all of it though???

 

[mshan]

"I hope the first thing they do is take those goddamn commercials off the air."

Yeah, but people are smart.

 

[dullard]

Originally posted by: Whoozyerdaddy
FWIW... An e-mail I got tonight from our CW rep...

To Our Valued Business Partners,
Corporate net worth of nearly $15 billion
More than $180 billion in net available liquidity (as of June 30 and documented in an Aug. 3 regulatory filing)

As of Aug 16, all of that changes. From that article

Embattled Countrywide Financial, the nation's No. 1 writer of mortgage loans, was forced to tap an $11.5 billion line of credit Thursday to address its looming liquidity crunch, and it said it is toughening the underwriting standards on the home loans it will make going forward..."In response to widely-reported market conditions, Countrywide has elected to draw upon this entire (line of credit) to supplement its funding liquidity position," it said in its statement.

They have $180 billion available. And now they were just forced to use $11.5 billion of it. An expensive $11.5 billion at that. So say goodbye to high profits.

 

[dmcowen674]

Originally posted by: Whoozyerdaddy
FWIW... An e-mail I got tonight from our CW rep...

To Our Valued Business Partners,

While numerous other lenders have shut their doors entirely this year, we have:
delivered more than $900 million in net earnings during the first half of 2007

He might be puffing... or it could be that as the mortgage sector takes a dive, CW, being the largest in the group, would naturally take a hit. I personally think that's the case. The sector is taking a beating and CW is the big kid on the block. I think they're going to be fine.

If they are so liquid why would they need an $11 billion dollar loan???

8-16-2007 Stocks extend slide on Countrywide news

Countrywide said early Thursday it was forced to draw on an $11.5 billion credit line to fund operations.

 

[heyheybooboo]

Originally posted by: dmcowen674

I didn't know they got Homebanc.

They didn't get all of it though???

(surprise-surprise) After announcing on August 7th that Countrywide Financial Corporation would acquire certain assets related to retail mortgage operations, HomeBanc Corp. filed for Chapter 11 bankruptcy protection August 10th.

In its bankruptcy filing, HomeBanc said it has $5.1 billion in assets and $4.9 billion in liabilities. Its top creditors include J.P. Morgan Chase Bank, KeyBank, U.S. Bank, BNP Paribas, Deutsche Bank, Bear Stearns Mortgage Capital Corp. and First Charter, among others.

They picked the bones of Homebanc for what they wanted- welcome to mortgage industry consolidation.

 

[Vic]

CFC is loaded with liquidity. Yeah, they're having to tap into it a bit to get through this crunch but otherwise they're fine. This latest bit of FUD is pushing the "make a run on the banks" level.

And see, LK, this is what I was warning you about. You can't control a panic stampede once you've started it. Next thing you know, people are going to start predicting Wamu's collapse (oh wait, that FUD already happened).

 

[Vic]

Originally posted by: dmcowen674

Originally posted by: Whoozyerdaddy
FWIW... An e-mail I got tonight from our CW rep...

To Our Valued Business Partners,

While numerous other lenders have shut their doors entirely this year, we have:
delivered more than $900 million in net earnings during the first half of 2007

He might be puffing... or it could be that as the mortgage sector takes a dive, CW, being the largest in the group, would naturally take a hit. I personally think that's the case. The sector is taking a beating and CW is the big kid on the block. I think they're going to be fine.

If they are so liquid why would they need an $11 billion dollar loan???

8-16-2007 Stocks extend slide on Countrywide news

Countrywide said early Thursday it was forced to draw on an $11.5 billion credit line to fund operations.

Because that credit line is part of their liquidity, moron.

 

[rchiu]

Originally posted by: Vic

Originally posted by: dmcowen674

Originally posted by: Whoozyerdaddy
FWIW... An e-mail I got tonight from our CW rep...

To Our Valued Business Partners,

While numerous other lenders have shut their doors entirely this year, we have:
delivered more than $900 million in net earnings during the first half of 2007

He might be puffing... or it could be that as the mortgage sector takes a dive, CW, being the largest in the group, would naturally take a hit. I personally think that's the case. The sector is taking a beating and CW is the big kid on the block. I think they're going to be fine.

If they are so liquid why would they need an $11 billion dollar loan???

8-16-2007 Stocks extend slide on Countrywide news

Countrywide said early Thursday it was forced to draw on an $11.5 billion credit line to fund operations.

Because that credit line is part of their liquidity, moron.

I am afraid that many solid mortgage company is gonna be destroyed by all these fearmongering going on in the market. All these company do have solid asset from the prime mortgage lending, however they still need lots of cash for their day to day business.

Anyone who runs a business knows that they need revolving line of credit to meet short term cash need, like buying inventory when they haven't receive payment from their customer. Mortgage industry is the same, they need lots of cash to meet their day to day operations.

When MBS was hot, cash comes easy, they can sell all their loans as MBS and get cash. But now, it is hard to securitize their loans since the demand is not there anymore. What's worse is that banks are not lending, or lending at a very high interest rate because of the perceived risks to the mortgage companies.

That's the reason many mortgage company goes into bankruptcy, not because their loan is worthless, it's because they cannot convert loans into cash fast enough to meet their cash obligations.

All these fearmongering in the market place is not helping, it only make banks less likely to lend money to mortgage companies, and that's why CFC need to tap as much credit line as possible to reduce the risk.

 

[dmcowen674]

Originally posted by: heyheybooboo

Originally posted by: dmcowen674

I didn't know they got Homebanc.

They didn't get all of it though???

(surprise-surprise) After announcing on August 7th that Countrywide Financial Corporation would acquire certain assets related to retail mortgage operations, HomeBanc Corp. filed for Chapter 11 bankruptcy protection August 10th.

In its bankruptcy filing, HomeBanc said it has $5.1 billion in assets and $4.9 billion in liabilities. Its top creditors include J.P. Morgan Chase Bank, KeyBank, U.S. Bank, BNP Paribas, Deutsche Bank, Bear Stearns Mortgage Capital Corp. and First Charter, among others.

They picked the bones of Homebanc for what they wanted- welcome to mortgage industry consolidation.

That's sad.

I knew some good people that worked for them in Atlanta.

Back to the designed corruption:

"After announcing on August 7th that Countrywide Financial Corporation would acquire certain assets related to retail mortgage operations, HomeBanc Corp. filed for Chapter 11 bankruptcy protection August 10th."

How is this any different than shorting a Company to pull money out from the bottom?

It isn't. It's designed legal corruption by the rich.