I just hate to gloat about today’s stock plunge…
Well maybe not seeing that Countrywide Financial (NYSE:CFC) worked so tirelessly for so many years to either get people hooked on toxic loans or to consolidate their current and future traditional short term debt into their homes imaginary equity.
During the run-up years, Countrywide offered every product imaginable; subprime ARMS, no-doc, 80/20 zero down, interest only, 1 year out of bankruptcy, the list goes on and on.
All this done simply to bloat, some would say artificially, the bottom line.
Now, the chickens have come home to roost and Countrywide is due for an exuberant pecking.
Send in the impairment charges! Stock up for the loan losses!
In their latest quarterly earnings release for Q2 2007, Countrywide reported impairment charges of $417 million with $388 million coming from residual securities collateralized by PRIME home loans.
These losses were attributable to “accelerated increases in delinquency levels and increases in the estimates of future defaults and loss severities on the underlying loans.”
Additionally, Countrywide had to set aside $293 million for “held for investment” loan losses with $181 million of that related to PRIME loan losses.
The mania is over and now Countrywide will spend many years digging out from under the burdensome losses.
