Countrywide says foreclosures highest on record
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By Jonathan StempelNEW YORK (Reuters) - Countrywide Financial Corp , the largest U.S. mortgage lender, said on Wednesday that foreclosures and late payments rose in December to the highest on record, though it made more loans than expected in the fourth quarter.Its shares fell as much as 20.2 percent as concern persisted that Countrywide might seek bankruptcy protection. The shares fell 27.4 percent on Tuesday though Countrywide rejected an identical rumor."Rumors of bankruptcy are still surrounding Countrywide," said William Lefkowitz, options strategist at brokerage firm vFinance Investments. "Investors still believe that they need an infusion of capital."In its monthly operating report, Countrywide said the foreclosure rate among the 9.03 million mortgages for which it collects and processes payments doubled to 1.44 percent from 0.70 percent a year earlier, and rose from November's 1.28 percent. The delinquency rate rose to 7.20 percent of unpaid balances from 4.60 percent a year earlier.December's rates were the highest since 2002, the earliest period for which data are available.Like rivals, Countrywide has been hurt by falling home prices, rising defaults and tight capital markets, and now primarily makes home loans considered less likely to default. Chief Executive Angelo Mozilo has called the nation's housing slump the worst since the Great Depression."While the fact that credit is deteriorating is not a surprise, we believe the extent of the deterioration is a surprise and does not bode well for the fourth-quarter results of companies with mortgage credit exposure that may have to further add to reserves," wrote Bruce Harting, an analyst at Lehman Brothers Inc.In morning trading, Countrywide shares were down 55 cents, or 9.9 percent, at $5.00, after earlier falling to $4.43. Among other mortgage lenders, shares of Washington Mutual Inc were down $1.48, or 11.6 percent, at $11.25, while IndyMac Bancorp Inc fell 38 cents, or 6.7 percent, to $5.28.SUBPRIME NEARLY VANISHESCountrywide said it funded $23.4 billion of home loans in December, up 1 percent from November, though average daily mortgage loan applications fell 17 percent to $1.54 billion.Total lending fell 44 percent from $41.7 billion a year earlier, as subprime volume sank to $6 million from $3.74 billion. Mortgage lending in the quarter totaled $68.5 billion. The mortgage servicing portfolio rose to $1.48 trillion at year end, as homeowners prepaid fewer loans.Countrywide also said its banking unit ended the year with $61 billion of deposits, up $2.3 billion from November.The company is offering yields above 5 percent on some certificates of deposit and savings accounts to attract cash after credit markets seized up last year."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.Countrywide 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. The company said it ended December with 50,600 employees, down from 61,586 in July.(Additional reporting by Doris Frankel in Chicago; Editing by Derek Caney and Dave Zimmerman)
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