March 12, 2007
FLASH: Subprime king Countrywide (hello Sarbanes-Oxley) finally comes clean, says it may face "earnings volatility". You don't say!
I think there are now grounds to open an SEC investigation for insider stock dealing, stock manipulation and false statements at Countrywide.
Just last week Angelo Mozilo had Countrywide's CFO marched out to proclaim how happy days were here, and how Countrywide was a "top-conditioned athlete", even though they knew subprime is in 100% meltdown mode, 19% of their subprime loans are already delinquent, and the disease has likely spread to their Alt-A portfolio.
Well, now today, possibly because of the advice of legal council, Countrywide started coming clean just a bit. Or maybe Mozilo and the corrupt insiders at CFC finally sold through the shares they had available to dump.
Note: Like Mozilo and the CFC insiders, I'm betting the stock will continue to free-fall and am short CFC. Oh, anyone see NEW is off another 50% today, down 95% in the past six weeks? Nah, no problems in subprime. None at all.
NEW YORK, March 12 (Reuters) - Countrywide Financial Corp., the largest U.S. mortgage lender, on Monday said it has minimal exposure to nonprime mortgages, but may still experience fluctuating earnings in the near term due to turmoil in the U.S. subprime market.
The company said it was tightening its underwriting standards, adding that nonprime loans were only 7 percent of its funding volume in February.
Countrywide said it should benefit from competitors exiting the market. But the company may experience some short-term earnings fluctuations as difficulty in the subprime market cut into the amount of money it generates from selling loans to investors, and the value of the loans it hangs onto.
The lender also said it made $35 billion in mortgage loans in February, up 10 percent from a year earlier but down from January.
Countrywide said loans to less creditworthy borrowers fell to $2.6 billion from $2.8 billion a year ago.