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Countrywide Lending Stabilizes, Foreclosures Rise

Reuters
Wednesday, 9 Jan 2008 | 10:46 AM ET

Countrywide Financial, whose shares have tumbled on concern it might not survive the nation's housing crisis, said Wednesday it made more loans than expected in the fourth quarter, though foreclosures among loans it services increased.

AP

In its monthly operating report, the largest U.S. mortgage lender said it funded $23.4 billion of home loans in December, up 1 percent from the prior month, though down 44 percent from $41.7 billion a year earlier. Average daily mortgage loan applications fell 17 percent from November to $1.54 billion.

"Management is pleased with the progress we have made in positioning the company to navigate the current challenging environment," Chief Operating Officer David Sambol said in a statement.

For the quarter, Countrywide said it funded $68.5 billion of mortgage loans, and $69.2 billion of total loans.

The lender also said it has cut 10,986 jobs since the end of July, achieving its goal of eliminating 10,000 to 12,000 jobs by the end of 2007. Countrywide said it ended the year with 50,600 employees, down from 61,586 in July.

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Countrywide shares had fallen 27.4 percent on Tuesday, even after the Calabasas, California-based company rejected market rumors it was considering filing for bankruptcy protection.

Like many rivals, Countrywide has been hurt by falling home prices, rising defaults, and tighter capital markets. Chief Executive Angelo Mozilo has said the housing slump is the worst since the Great Depression.

In its monthly report, Countrywide said foreclosures and delinquencies among the 9.03 million mortgage loans for which it collects payments rose in December to the highest level since 2002, the earliest period for which data are available.

It said the pending foreclosure rate rose to 1.44 percent from 1.28 percent in November and 0.70 percent a year earlier, while the delinquency rate rose to 7.20 percent from 6.52 percent in November, and 4.60 percent in December 2006.

Countrywide's mortgage loan servicing portfolio rose to $1.48 trillion at year end, as homeowners prepaid fewer loans.

Shares of Countrywide were 9 percent lower .

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