Magazine article American Banker

Countrywide Foreclosure Spike

Magazine article American Banker

Countrywide Foreclosure Spike

Article excerpt

Countrywide Financial Corp.'s foreclosure rate hit its highest level in more than 15 years last month as delinquencies jumped dramatically from a year earlier.

The Calabasas, Calif., lender disclosed the data Thursday in what it said would be its last monthly release of operational results. Its deal to sell itself to Bank of America Corp. is scheduled to close in the third quarter.

The numbers made clear that Countrywide continued to feel the strain of the deteriorating mortgage market in February.

Its foreclosure rate, as a percent of unpaid principal balances in the $1.5 trillion mortgage servicing portfolio, rose 84 basis points from a year earlier and 16 basis points from the end of January, to 1.64%.

Rick Simon, a spokesman for the company, said the February foreclosure rate had not been reached since the recession of 1991.

The delinquency rate in Countrywide's servicing portfolio rose 296 basis points from a year earlier, though it fell 3 basis points compared with January, to 7.44%, its second-highest delinquency rate in a decade. (The highest was in January.)

Fred Cannon, an associate director of research and the chief equity strategist at KBW Inc.'s Keefe, Bruyette & Woods Inc., wrote in a note to clients Thursday that the average size of loans in foreclosure continues to increase because "most categories of loans have heightened levels of foreclosure."

Countrywide "has clearly encompassed more than the subprime meltdown," Mr. …

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