January 30, 2007

Countrywide (CFC) misses earnings, guides lower for 2007, yet says things will be rosy in 2008

Yet deep down, Mozilo knows he got out at the nick of time with his millions of option exercises. 2007 will be bloody. And he knows it. Sub-prime is cancer.

NEW YORK, Jan 30 (Reuters) - Countrywide Financial Corp., the largest U.S. mortgage lender, said on Tuesday fourth-quarter profit fell 3 percent as housing market conditions worsened and loan servicing income nearly disappeared.

The company also said it faces a "challenging" year in 2007, and projected a range of earnings per share that falls mostly below the average analyst forecast.

Mozilo: "Looking ahead to 2007, the industry will likely see continued pressure on margins as mortgage origination volumes decline and industry capacity is rationalized. We are also preparing for increased borrower delinquencies and continued credit deterioration. We believe, however, that 2007 will likely be the trough year of the current housing cycle and that 2008 should represent the beginning of upward trends associated with the next cycle."

(Disclosure - I own a July 2007 CFC put - betting the stock falls)

62 comments:

real estate 101 said...

A put might be wise. I heard from a very reliable source that Countrywide is in trouble. As in, they might not be here next year. They're looking for a buyer is the word on the street.
Any mortgage company that is tied up in subprime lending is on the ropes. Several have failed, many others to follow.
I personally know of a group of individuals that formed an "investment club" that bought dozens of homes in Florida. Those 15 homes now sit vacant with no buyers and no renters. How many months could you make a $3000/mo. payment on a bad investment? One of the club member told me he's on the ropes with his 2 houses. He can't BK, but he's trying to give them back to the bank.
A fool and their money will soon part.

Anonymous said...

Did you ever think we would see the Second Great Depression in our lifetimes?

FL_Bust said...

(Disclosure - I own a July 2007 CFC put - betting the stock falls)

That makes two of us.
Hope the B of A merger/acquisition of CFC doesn't go through.

Anonymous said...

oh my god!

with that fake tan and bleached teeth, he's the typical swarmy salesman. who would buy anything ffrom tht putz.

freaks like him are all over boca.

bozonian said...

Evidence of why this crash is going to be hard.

Here is a list of foreclosures for a small town near to where I live:

http://tinyurl.com/2or6ab

Notice there are a few people holding many houses in foreclosure. These are flippers gone bad.

Whoever made the loans to this guy is losing money.

Anonymous said...

.
.
.
.
Is that what the guy REALLY looks like??

Anonymous said...

Mozilo,CFC = Franklin Raines,FNM

Nuff said.

Anonymous said...

Nice tan!

Anonymous said...

It always amazes me how these guys get out just in the nick of time!

devestment said...

Wow! That guy has one heck of a tan. I can imagine that he is very concerned about the state of the market as his 150 million dollar parachute will buy quite a bit more in the new economy.

Anonymous said...

It does get old hearing pundit after pundit talk about how now is the time that we've bottomed out and that things will be rosy from here on out.

Ok, it seems to make sense since 2007 will have more ARMs ajust than any other year. So everyone goes bankrupt in 2007 right? Wrong. Take a friend of mine in San Diego.

-His toxic loan reset in mid-2006
-He's upside down on his house 20%
-He got his girlfriend pregnant
-He's got $60k in credit cards.

His rosy story was that his house was going to go up 20% (not down) and he'd pay off his credit cards.

Now with the added expense of a child from an estranged girlfriend, he's been dipping into his 401k money just to stay above water. He's convinced that housing will be back up 20% and more in no time. If housing doesn't go up significantly in 12 to 18 months, he'll run out of money and will be FORCED TO SELL ALMOST 2-3 YEARS AFTER HIS LOAN RESET.

How many times do you think that will replay. The "lag time" between reset and finanical ruin?

I wouldn't touch bubble markets for at least another 2 years.

Anonymous said...

With that pinched face and put-on smile, he looks like some of the "mature" washed up losers working the seniors and stupids in places like Florida and Phoenix, epicenters of housing mania.
They usually sell real estate ,cars or insurance and hilariously try to elevate the job of a lying shill to one of professioanl status.
The giveaway are things like the cheap shoes, poor vocabulary or the immediate sleazy "friendliness".

Just another component of the great all-American circle-jerk.

ColumbusOH said...

Holly cow, Miami is the ground zero!

I have never seen a city posting over 100,000 properties for sale, and this is still Winter. LOL!

You can check out various cities data at this good site:

http://www.housingtracker.net/askingprices/Florida/Miami-FortLauderdale-MiamiBeach/

Anonymous said...

Help is on the way!
Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., says he is working on legislation to prevent an “unprecedented” wave of subprime foreclosures and to give homeowners a grace period so they can get back on their feet. “This is a homeownership crisis of unprecedented proportions,” Sen. Dodd told a group of mayors. He is planning to hold hearings soon, possibly in two weeks. The committee chairman indicated that the legislation might include a rescue fund. “That is a possibility, but it would have to be paid back,” he told reporters. Sen. Dodd also told reporters that he wants to move quickly on GSE legislation to strengthen regulation of Fannie Mae and Freddie Mac and pass a bill in the next two months. He said the Senate government-sponsored enterprise bill will be a “little different” from the House bill. And he declined to take a position on raising the GSE loan limits. “I have to be careful about jumping into that,” Sen. Dodd said after speaking to the mayors. “I want to talk with my colleagues first.”

Anonymous said...

http://biz.yahoo.com/ap/070129/foreclosures_massachusetts.html?.v=1


Foreclosure Up by 70 Percent in Mass.
Monday January 29, 5:44 pm ET
By Denise Lavoie, Associated Press Writer
Foreclosure Petitions Increase by 70 Percent in Massachusetts


BOSTON (AP) -- Foreclosure petitions jumped nearly 70 percent in Massachusetts in 2006, driven by the state's slumping housing market, according to a report issued Monday.
Mortgage lenders filed 18,926 petitions to foreclose on homeowners in Massachusetts Land Court in 2006, compared with 11,155 in 2005, according to figures compiled by The Warren Group, a Boston-based publisher of Banker & Tradesman and regional real estate data.

Anonymous said...

http://biz.yahoo.com/ap/070129/foreclosures_massachusetts.html?.v=1

AP
Foreclosure Up by 70 Percent in Mass.
Monday January 29, 5:44 pm ET
By Denise Lavoie, Associated Press Writer
Foreclosure Petitions Increase by 70 Percent in Massachusetts


BOSTON (AP) -- Foreclosure petitions jumped nearly 70 percent in Massachusetts in 2006, driven by the state's slumping housing market, according to a report issued Monday.
Mortgage lenders filed 18,926 petitions to foreclose on homeowners in Massachusetts Land Court in 2006, compared with 11,155 in 2005, according to figures compiled by The Warren Group, a Boston-based publisher of Banker & Tradesman and regional real estate data.

Anonymous said...

Filthy DemoRat left-wing trash Senator Chris Dodd is introducing a FB bailout bill in Congress. the libtards have always been on the payroll of the REIC

http://www.nationalmortgagenews.com/fraud/

Anonymous said...

Illinois DemoRat Governor Rod Blagojevich has suspended a new law that is cracking down on predatory and subprime lenders. The average DemoRats - left-wing whores bought and paid for by the REIC.

http://cbs2chicago.com/local/local_story_020143450.html

Anonymous said...

“If only you believe in miracles, baby, so would I ... ”

Anonymous said...

THAT guy's tan is amazing. How did he get that? Fake Bake? Cooking books? Oven flame? Beach? Golfing?

He looks like Ernest Borgnine in Buck Rogers

lost_cause said...

We need to help the victims of subprime lenders.

What the Hell said...

Good Lord Keith!

That picture. What did you do? Look up the definition of Greasy Dick MoFo and that popped up!

Anonymous said...

Wow, that guy's orange! He reminds me of The Thing... that lovable guy from the Fantastic Four who was made out of orange rocks.

Banker said...

Do you think the economy will be led into a slowdown (considerable) if the housing markets suffers in 2007 ?

BlueEventHorizon said...

And yet CFC closes at an all-time high. Go figure.

Got blown out of CFC short on that insane 10% day. LOL!

casey_has_jumped_the_shark said...

FIRST

Anonymous said...

The orange man denies the impending disaster and the stock goes up today

Yup, the market is fixed

Anonymous said...

That's the picture from the wax museum right?

Anonymous said...

July 2007 CFC put

The best investment tip!

keith said...

This may seem obscure, but it will eventually cause our banking system to melt down

Does anyone realize that on a negative am loan, where the homedebtor doesn't make the normal payment, the shortfall accumulates as increased debt

Well, the banks, and CFC, take that shortfall, say $500 a month, and do you know how they treat that? Nope, not as risk, not as debt that won't be repaid (because it won't).

Nope, they TREAT THAT SHORTFALL AS INCOME STRAIGHT AWAY, IMMEDIATELY

In other words, earnings are inflated by the shortfall.

Sick. Absolutely sick.

From Countrywide's quarter, notice the 782% jump in negative-am income

Countrywide Earnings Dip; Neg-Am Surges

Countrywide Financial Corp., Calabasas, Calif., has reported slightly lower fourth-quarter earnings than in the fourth quarter of last year, but also revealed a huge jump in accumulated negative amortization on its payment-option ARM portfolio. According to the lender’s earnings statement, it holds $32.7 billion in option adjustable-rate mortgages on the balance sheet of its bank, a 23% gain from last year. But its option ARMs have accumulated negative amortization of $653 million — a stunning increase of 782% over 12 months. Countrywide earned $622 million in the fourth quarter (down 3%), but had record earnings of $2.67 billion for the year. It funded $124 billion in the fourth quarter (mostly residential), an 8% drop from that of the fourth quarter of 2005. Acquisitions by its capital markets conduit fell 69%, to $2.7 billion. Countrywide now services $1.298 trillion in loans, a 17% increase from a year ago. The company can be found online at http://www.countrywide.com.

Anonymous said...

"Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., says he is working on legislation to prevent an “unprecedented” wave of subprime foreclosures and to give homeowners a grace period so they can get back on their feet."

Lord knows I despise the GOP, but when these clowns get in in '09 you can kiss the dollar goodbye as we complete our descent into socialist hell.

Anonymous said...

The S&P/Case-Shiller composite index showed a 1.3 percent year-over-year increase in the price of a single-family home based on existing homes tracked over time in 10 metropolitan markets.

For its 20-city composite index, prices grew 1.7 percent, the slowest rate ever for that data, according to the S&P index committee chairman, David Blitzer. That data has been collected since 2001.

"The weakness continues to spread," Blitzer said. "I don't see any signs of a bottom. Unfortunately, it's still looking pretty nasty from a housing point of view."

Anonymous said...

You know Dodd's comments are the "inanutshell" problem of doing something that delivers nothing. The best thing they could do to help a subprime borrower (as though there should even be such a category) is to force them to pay taxes for the services they demand (i.e, health care, good schools, good infratstructure) rather than "making it possible" to buy a house they can't afford. I've about had it with people telling me that I have to pick up the financial mess of people who live irresponsibly. Does Senator Dodd realize that these subprime borrowers never had to fork over money out of their own pockets to buy the house in the first place??? So they lose it and go back to renting, how else are they going to afford the $300 car payment they took on for the truck they couldn't afford. I know I'll be in the minority here in saying this, but one reason I can't buy the free market mantra is that there's no not bailing out those members of the community who act like parasites, be it Enron executives or people who deliver children into poverty.

Anonymous said...

Nope, they TREAT THAT SHORTFALL AS INCOME STRAIGHT AWAY, IMMEDIATELY
In other words, earnings are inflated by the shortfall. Sick. Absolutely sick. From Countrywide's quarter, notice the 782% jump in negative-am income.
++++++
Is Bank of America still considering buying Countrywide? Man alive! Talk about a death wish....

Anonymous said...

"Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., says he is working on legislation to prevent an “unprecedented” wave of subprime foreclosures and to give homeowners a grace period so they can get back on their feet."
++++++++++
A "grace period"? What's the point? The majority of these subprime borrowers couldn't afford to buy their homes in the first place. They never WILL be able to "get back on their feet"....

Anonymous said...

you all think that guy looks like a freak? you should visit Southern Cal sometime, there are phony cheeseballs driving their AMG S500's like him everywhere! it's disgusting, So Cal has become cheeseball central. it used to be a laid back place where the people were friendly and mellow, now it's money, money, money and all the slime that goes with that mentality!

Anonymous said...

Here is a list of foreclosures for a small town near to where I live:

http://tinyurl.com/2or6ab

Notice there are a few people holding many houses in foreclosure. These are flippers gone bad.
+++++++++++++
I think we're going to see this phenomenon all over the country. I predict there are a LOT more "flippers" than anyone is counting on because so many people turned to investing in housing after the stock market crashed with the tech bust....

Anonymous said...

So they lose it and go back to renting, how else are they going to afford the $300 car payment they took on for the truck they couldn't afford

It is statements like these that give away the renters around here. You are pathetically low income sponges despite the bullshit you spew. You think a $300 car payment is a lot? Jeezuz maybe back in 1986 that was considered high. Today $300 might buy you a used Hyundai if you're lucky.

No wonder you freaks think $500K for a home is expensive, you can't even afford a decet car.

Anonymous said...

Keith,

Unfortunately, to be a big Kahuna in charge of a big lending institution you have to know how to manipulate numbers. These guys are the best at using accounting tricks to keep the stock price up.

The basic trick is to accelerate income and defer expenses and hope for the best.

You are right this will all come out in restated earnings, sadly it the restatement will occur after the big Kahunas exercise there options.

striker said...

A TAN? I think he's a black man with the bird flu.

Anonymous said...

Yep all that easy money lending, (REPUBLICAN 'supply side' voodoo)
that came into play as soon as the republicans controlled all branches of government, will be their undoing. That 500 billion $+++ Bush Iraqi war of choice, and growing is the creme de la creme, the coup de graux.

LOL, personally they scheitt in the hat of us all, and as a consequence we all will eat the bush built scheitt sandwich, with the silver lining being that these bastards will never ever get the trust of the american people again. Americans are stupid, but we learn sooner or later. The republican con will one day run its course; and it is my prediction this filth will go the way of the whig party. Then and only then, the healing can begin!!!

The glory of it all, but as they say in the gym; you got to pain to gain, and 2006 was a fine beginning.

GowdTeef$ said...

I seem to remember a website that was tracking the subprime mortgage lenders, anyone remember which site that was?

Anonymous said...

Geeez....back away from the tanning bed buddy!

Anonymous said...

BOA is still considering a merger w/ CFC.

Last fall I read a businessweek article about how NegAmOptARM unpaid interest relates back to the origination of the loan and how its treated as income for the bank. They highlighted a bank called BankUnited out of Florida and noted how the NegAmOptARM income was the difference between the bank being in the black verses the red for the quarter.

Anonymous said...

Could you imagine working for an orange guy? How does anyone get any work done?

Anonymous said...

Home-loan house of cards ready to fall
The collapse of the subprime credit market may come this year, with a major subprime lender going broke. The repercussions will haunt us for years.

Latest Market Update
January 30, 2007 -- 16:20 ET
[BRIEFING.COM] Considering the breadth of disappointments on the earnings front and soaring prices across the energy complex ahead of a plethora of economic data that also includes an update on monetary policy, stocks actually held up rather well... More

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Article Tools
E-mail to a friendTools IndexPrint-friendly versionSite MapDiscuss in a Message BoardArticle IndexBy Bill Fleckenstein
With all the talking-head babble about our economy being "not too strong, not too weak, but just right," I think it's high time for a new entry into my "Fleckisms." I'm going to call those who take up that cause "Goldilocksters."

An optimistic lot, the Goldilocksters have been deaf to the increasing rumblings emanating from an arena that has powered our economy for the past few years: the housing market -- and specifically the financial dark matter/subprime credit spigot that has fueled its epic rise.

Bird's-eye view of a bitter housing brew
This week brings an update on the deterioration, via comments from two very knowledgeable friends. One of them, a former top executive at a subprime lender (whose chronicling of the unwind has been amazingly accurate and timely), told me that serious issues are developing, and that large companies like New Century Financial (NEW, news, msgs), Accredited Home Lenders (LEND, news, msgs) and NovaStar Financial (NFI, news, msgs) will, in his words, "hit the wall" very soon. He writes:

"We had a loan that was FPD (first-payment default) on a home in So Cal. It is a very nice high-end town that had a section of new homes built . . . in the low end of town. Normal homes sold for $1 million in value. In this new seven-home development, (homes) sold for $1.3 million to $1.5 million each. The homes you had to drive through to get to this place were worth $400,000 to $500,000. The market topped out, and now most of the seven homes are vacant -- worth no more than $900,000. Thus, all the lenders are sitting on losses of $400,000 to $600,000. This is just one of many that are happening daily.

"The commentary I am getting from field and legit brokers is that fraud is an out-of-control locomotive. Stated-income loans are now finished for all the unemployed people around. We will quickly see cash-out loans curtailed. This vicious cycle has yet to play out. We are in the second inning of the unwinding.

bozonian said...

Lol! Grace period! All it's going to do is make the screwed debtors wait even longer to short sale and then their houses will be worth even less.

There is no fixing this without destroying the dollar.

No one can fix Social Security. No one can fix Medicare. No one wants to raise taxes. This country is so at odds with itself nothing gets done. The government will simply borrow the money to make up difference. This will lead to a complete collapse of the dollar due to hyperinflation.

Anonymous said...

Oh, and stop making fun of people or judging them by the way they look. It's mostly irrelevant and shows your stupidity.

chris said...

Hey Bozonian regarding the foreclosures in San Bernadino I declare Ted Bultsma as the "King of Flippers" in trouble. This guy has got 14 properties in foreclosure. Casey Serin shouldn't feel so bad. Sucks to be Ted

Lost Cause said...

lost_cause said...
We need to help the victims of subprime lenders.


Still got your panties in a bunch because I critized your stupid politics -- which seems to consist of mainly name-calling? "If I am not a Nazi, then I must be a Commie." Is that the way it goes? This blog is total bullshit.

Anonymous said...

Revelation ..............He the Anti- Oompa Loompa from Loompa land. Must be the evil one comming back to raid our piggy banks. Now He has the Golden ticket! Save us ... Willy Wonka. This guy is evil.
Listen and sing along to the Wise Oompa Loompa's of yesteryear. There is a hidden message to our future housing market ! http://www.youtube.com/watch?v=ZkXMLsuhYu0

Anonymous said...

http://ml-implode.com/
---------------------------------
"I seem to remember a website that was tracking the subprime mortgage lenders, anyone remember which site that was?"

bub said...

GowdTeef here ya go:

The Mortgage Lender
Implode O Meter

http://ml-implode.com/

Anonymous said...

"We need to help the victims of subprime lenders."

No "we" DONT! F*ck 'em! They took the risk, and NOW they SHOULD feel the hard PAIN!!! Remember, being STUPID should be VERY PAINFUL.

Anonymous said...

"It is statements like these that give away the renters around here. You are pathetically low income sponges despite the bullshit you spew. You think a $300 car payment is a lot? Jeezuz maybe back in 1986 that was considered high. Today $300 might buy you a used Hyundai if you're lucky.

No wonder you freaks think $500K for a home is expensive, you can't even afford a decet car. "

HAHAHH You sound like a f*ck borrower/Too much home debtor to me!

Anonymous said...

Oh, and stop making fun of people or judging them by the way they look. It's mostly irrelevant and shows your stupidity.

That's what kids do. The average blogger here has the mentality of a 14 year old, led by KEIF himself. If Beavis and Butthead ever ran a blog, this would be it.

Anonymous said...

You know I really think this blog has a lot of fantastic stuff on it, so it makes me wonder why aren't you willing to stop posting the hateful filth no matter what direction it's coming from. It's just too much trouble to keep saying to myself that I have to ignore it.

real estate 101 said...

I told you my source was accurate about Countrywide. A Put would be wise. This is the tip of the iceburg.


Bank of America and Countrywide Financial Corp. are reportedly in
negotiations over a merger or alliance. Citing people close to the matter,
the Financial Times reported Friday the two giants have held discussions.
Countrywide reported $462.5 billion in residential originations last
year -- more than any other U.S. lender. The combination of the two
companies' residential servicing portfolios -- at more than $1.6 trillion
-- would create the largest U.S. servicer.
Such a deal might be one reason Countrywide CEO and Chairman Angelo
Mozilo delayed his retirement last year.
"If there is to be an acquisition or a merger or an alliance with Bank
of America, he would want to still be CEO when a deal is completed," an
industry official told MortgageDaily.com.
(http://www.mortgagedaily.com/MergerBoaCountrywide012907.asp?spcode=pr)

Anonymous said...

Mozilo: 40-50 B&C Firms a Day Going Bust
Countrywide chief executive Angelo Mozilo estimates that 40 to 50 subprime firms are going out of business each day, a trend that likely will continue all year. During a conference call discussing Countrywide's earnings, Mr. Mozilo -- in response to a question -- said analysts are seeing reports of two to three firms failing each day, but that the number is much larger. Addressing the carnage in the subprime sector, Mr. Mozilo said, "I think we have a way to go on that."

chris said...

That's what kids do. The average blogger here has the mentality of a 14 year old, led by KEIF himself. If Beavis and Butthead ever ran a blog, this would be it.

"Yeah house flipping is cool beats flipping burgers at burger world."

"Yeah uh uh uh were gonna get like money and chicks and nachos and stuff uh uh uh"

"Yeahhhhh were gonna score with that realtor whore"

"Settle down Beavis we have to like uhhh put in uhh granite and stainless steel uhhh refrigerator and stuff first"

"Cool Butthead you have good ideas....were cool"

Anonymous said...

Sen. Dodd is an idiot if he thinks that the gov. should lend money to these dipsh8ts who couldn't pay off their first loan.

this is taxpayer bailout. If he wants to help anybody, let him pay from his own pocket. He's probably got a few relatives who are in over their heads. Just start and end with them.

And if he really wants to help EVERYBODY, let these people foreclose, drive home prices down to 2X incomes and get this country and it's citizens back to fiscal sanity.

If the Dems do any of this crap, I'll never vote Dem again. Period.

Wonder what Ron Paul has to say about the idea of taxpayer bailouts for FB's?

Anonymous said...

Good point about the FB's Sen. Dodd wants to "help" by giving money: Those FB's never paid any money in the FIRST place. So lets just keep showering these bozos with free money and a free place to live while the rest of us get screwed.

HELLO!!! You lose your house to foreclosure and then you go RENT for a fraction of what the mortgage cost you.

THAT's the way it works Sen. Dodd.