September 09, 2007

Why is Countrywide possibly going bankrupt? Well, for starters, they're now have $2.5 BILLION in "Countrywide-Owned Homes" and growing









Here's three ugly charts - Mozilo 2007 stock dumping, CFC stock price last 90 days (I'm short CFC) and "Countrywide-Owned Home" inventory since January. Anyone see any trends?

Oh dear god, does Orangelo have a mess on his hands. Nice move dumping hundreds of millions in CFC shares before he ENRON'ed, eh? Here's the full list at Angelo's "Properties Owned by Countrywide" page.

Anyone wanna guess how many BILLIONS of dollars of taken-back homes Countrywide (and their partners and receivers) will end up with when it's all said and done? And anyone want to guess if CFC had to mark to market what these homes are REALLY worth today? Someone do us a favor and get a hold of Countrywide on one of these and see what % off they're willing to go!

Wow. Nice work Angelo. Great business ya got there. Sucker born every minute.
Hattips to themessthatgreenspanmade and countrywide-foreclosures for the data...

23 comments:

hendry said...

BK will be after the next CC. Their books will look so bad that nobody will extend credit to them.

The big banks will pick up the pieces at pennies on the dollar like a flock of vultures feasting on a rotting wildebeest carcass.

keith said...

Here's Cramer on what BofA is doing to Countrywide right now

Loan Sharking them down to $0

http://www.thestreet.com/comment/rewrite/985564.html?puc=_tscs

And Angelo is so dumb he probably didn't see it coming

___

You see, the convertible owners and the common stock holders are at war, and you have sold out your common stock holders because you did not put in an anti-short provision for Sisyphean. (They wouldn't have done the offering if you hadn't. Their whole point is to destroy your stock!!) How do they win? Let's count the ways. They get the hefty yield. They get the interest on the proceeds from the short side. (They sell the stock and earn income on those proceeds.) And if they can put you near bankruptcy, they can cover the short, make the profit and live off the yield. If they put you in bankruptcy, they never have to cover! But they do lose the dividend. That's OK; the short-side trade more than makes up from the losses from the bond.

keith said...

I thought you'd all want to see the countrywide letter to employees. here you go

http://s3.amazonaws.com/GNB/countrywide-letter09072007.pdf

Here's my favorite part (of course) - the BLAME THE MEDIA AND BLOGS part


Lastly, as some of you know, we recently have been the target of critical and inaccurate coverage
by media woefully uninformed about our Company, our business and our industry. We would like
to address this issue because Countrywide’s reputation is of paramount importance to all of us
and it is crucial that you, our valued employees, are informed of the facts. Let us be clear: we
categorically reject the assertions in the media that are either false or taken out of context, such
as many of those in a recent New York Times article as well as others that followed it.
Furthermore, it has always been Countrywide’s policy to act responsibly, with the highest ethical
standards, and to deliver outstanding value to our customers. Our key differentiator has been---
and continues to be---our relentless focus on our customers, and offering them the broadest
choice of competitively priced products, and doing so while providing full disclosures so that our
borrowers make informed decisions about the loan product that best meets their needs and
financial situation.
Some of our constituents might assume that simply because something is published in the press
it is or might be true. For this reason we prepared a lengthy rebuttal to set the record straight in
response to the recent New York Times article. The rebuttal is posted on our website and we
invite you to read it in its entirety. Versions of it have been sent directly to various constituencies.

Anonymous said...

Worst Crisis In 20 Years To Come To A Head This Week - Times Sydney, September 09: The Sunday Times notes that leading bankers from around the world are warning that the worst crisis in the money markets in 20 years will come to a head this week when 113 BLN USD of commercial paper comes up for refinancing. This huge refinancing, mainly through London, exceeds the $100 billion that became due in mid-August, and which sparked the most serious phase in the money- market crisis, which has seen banks scrambling for funds and market interest rates rising sharply. "This is a serious pressure point," said one leading banker. The article states that even if they succeed in rolling over some of this paper this week, they will eventually be forced to take some of it much of which is of questionable value onto their balance sheets. To meet this potential liability, banks are hoarding cash and have stopped lending to each other. This has created a liquidity freeze.
The article goes on to say: "The prospect of serious market indigestion from maturing commercial paper is not the only headache for the banks. Globally, they have 380 BLN USD of loans and bonds to be laid off from leveraged buyouts and other private-equity deals at a time when the markets have shifted sharply against them."
The crisis in the credit markets is fluid and BOE expectations have changed radically since the crisis intensified just under a month ago. At that time nearly everyone expected the BOE to hike rates by the end of the year at least. The Times notes an IDEA survey that shows more than 60% looking for the next move to be an easing some time next year, although economists say that the situation is changing rapidly.

Anonymous said...

According to Kenneth Rogoff, former chief economist at the IMF, at least 1.3 trillion dollars have evaporated. At least one large bank will go bust, Rogoff says, adding that Moody's could go bankrupt too: "They make 45% of their profits with ratings on high-risk assets." But nobody knows where the largest holes are. "Not even the banks know that," says Alessandro Mitrovich of the Royal Bank of Scotland. "Even if we sat around a table, we would not get a picture of the situation."

Anonymous said...

I am probably asking a stupid question here. But Countrywide will have to pay property tax on all the foreclosures they're sitting on, right? So what happens if they can't?

Anonymous said...

Damn those are beautiful charts

Shakster said...

Cuz They suck.

Anonymous said...

The carrying costs on 2.5 billion in REO is huge, they need to just slach the price, take the loss against there earnings and reduce their tax load and turn off the carrying costs asap. The longer they wait to get a price that covers the loan balance the deeper in red they will go. But they, just like all sellers right now, just cannot accept this reality right now. Hence we will see ironic justice happen here. CFC has been an SOB refusing to refi/rework the loans that has resulted in them getting all this REO property. The load of this REO property now will accelerate the demise of CFC!!! They will now experience the misery that they have been handing out to all the borrowers that they sucked into this mess. Good riddance CFC, NEXT!!

Natural Eyebrows said...

Anon's question about property taxes is a good one. Real property taxes are a paramount lien - they survive any foreclosure. In most jurisdictions, there is an annual tax lien auction sale, and most liens get sold for cash to the highest bidder. The county gets its money, the winning bidder now owns the lien and can foreclose. But the waiting time to foreclose a tax lien can be several years. If it's that long, Countrwide will have time to sell the property and pay off the lien with the proceeds. The taxes will hurt down the road, but it shouldn't make their short term cash squeeze any worse.

This scenario will vary from one state to another, especially where there is a more accelerated procedure for tax lien foreclosure. But the question highlights just how many strings will be pulled out of this ball of twine as it unravels, and the potential for chaos.

Edgar said...

The property tax man always eats first.

Anonymous said...

.



Big Deal!


Angelo can pay cash from his stock sales or options!

ed loritz said...

Funny Stuff. I checked the bank properties for sale by Countrywide.
They show CA having 2819 homes for sale value 1,045,227,900 average price 370,780.
In Yorba Linda, CA they only show One home for sale.
I can tell you first had they have at least 7 in our community in Yorba Linda, CA of 62 newer homes.. Countrywide was into these houses for average of 2.3 mil each.(vacant for average of 4 months now)
They will not even CLAIM these homes. They sit vacant with No For Sale Signs.. they wont even pay the HOA dues. The HOA currently takes care of all these properties. Give me a break Countrywide.... Claim Your homes..or sell them to someone that cares.

mark to myth said...

Countryslide is done. Stick a fork in her. I give her 6 months tops.

The rub is that the fiat based credit system replete with mark to myth accounting cannot and will not be able to absorb commercial and residential depreciating values Y/O/Y. Who wants to be a bagholder?

This is the folly of the supplyside republicans. they created all that easy credit in the 20's and it blew a wad in their faces; and they did it again to us in the Bush-term. Ever notice there wasn't a regulator to be seen for miles while this ruse was playing out?

And now with each set of bad news, more and more publically held companies simply refuse to report earnings, or file their Q's. Its becoming a joke, and not one SEC or NYSE mandated shutdown YET.

The people in the US want this because they voted for the bush and his supplyside schitt sandwich for a second term. I hope all you pro-bushies are real hungry, because that scheitt sandwich is getting served up , up close and personal.

When the fed does cut rates and the dollar goes into the crapper, and the pension funds get raped thru inflation and underfunding; perhaps then the people will understand the consequences from being a conned sheeple minion. I dunno.

area 51 said...

Wow, Orangelo really ramped it up in August. How can he possibly defend himself?

j-dog said...

I heard Orangelo last week comment that he couldn't exercise his options when the stock trading price was under a specific level (I think he mentioned a price in the high teens).

Does anybody know if he was referring to his option price under which it wouldn't make any sense to exercise (buy) and sell? Or is there some other low stock price level which restricts his ability to exercise options when the trading price is lower than that level?

Anyway, he made it sound like he was no longer exercising options due to this restriction.

belchorama said...

Mark to Myth:

Word. Well put.

Anonymous said...

http://www.countrywide.com/purchase/f_reo.asp

Looking for a bargain on a home?
A Countrywide owned property (lender-owned), also sometimes referred to as a REO (real estate owned) home or property is often a way to get a good deal on a home or an investment property. You can use the tool below to search for Countrywide owned properties in your area.

Stuck in So Pa said...

"Natural Eyebrows said...
Anon's question about property taxes is a good one. Real property taxes are a paramount lien - they survive any foreclosure."

Here in Taxsylvania it takes a minimum of three years to get to a "third sheriff's" or "judicial" sale. That’s where the state wipes out all state tax liens (you still owe all the back federal and local taxes,) and any prior civil judgments and mortgages. First sale you inherit all liens, mortgages, and back taxes. Second sale you owe back taxes, but no PRIOR liens and mortgages. No one in their right mind ever bids on one and two. The only time to bid is at a “third” sale, but the bank is going to be the high bidder so no one bids anyway!
The last time I was up at the courthouse for a judicial sale, over 1600 properties were offered, and by #1483 (the one I was interested in,) only 8 or 9 totally free and clear properties had received a bid! Bid on a property, you must pay on the spot WITH CASH (can amount to tens of thousands) and the defaulting individual has a grace period (3-6 mos) to pay the back taxes and redeem the property. So if you bid and the original owner redeems, you are out the interest you could have been making on that money until his check clears the courthouse, and your money is also tied up for that period of time. No bid, it stays with the bank, year after year, taxes accumulate, and the banks pay nothing. Holding dead properties on their books cost them nothing at the state level, it’s only the federal bank auditors who can call them out on all the dead weight and cause them grief!
So don’t expect any housing fire sales by the banks anytime soon for something as paltry as unpaid real estate taxes!

Out at the peak said...

ed loritz:
Thanks for your hidden inventory observation. There is probably $800 million worth of Countrywide inventory waiting to be processed into foreclosure that should be REOs or sold at auction already.

Anonymous said...

Ok so let me get this straight. CFC officially has 2.5 billion of REO on the books. The carrying costs of this on a monthly basis being in the millions. Now on top of that these posts are indicating CFC is using a slow go shirking tactic to avoid putting another 800 million in REO on their books. So the real # is more like 3.5 billion and that they are attempting to NOT pay for all the carrying costs at the detriment of municipal revenue and home prices in the communities were all this REO is located. And this is before the coming tsunami of ARM adjustments this fall (EOM) that will result in a massive uptick in foreclosure and hence even more REO?

So how on earth "CFC" ever going to survive if all the costs they save by laying people off is just going to go toward REO carrying costs?

They do not have long to survive, I think 6 months is being generous. The reality is that a CFC bankruptcy will be a nice big fat Holiday present to all HPers!!

Anonymous said...

After consistently selling Mozilo really dumped hard last month at the record low price

Comprendo?

Anonymous said...

This isn't the full list. You have to add their foreclosed homes on their ReconTrust Company. Countrywide owns this company. http://www.ctcres.com/home.asp
The following states have properties listed for Trustee Sale.
72 Alaska
2038 Arizona
100 Arkansas
3696 California
280 Idaho
109 Montana
2 Nebraska
537 Nevada
466 Oregon
93 Texas
54 Utah
249 Virginia
576 Washington