T-minus ? until Countrywide goes under.. . .

NEW -> Contingent Buyer Assistance Program
Countrywide chairman's ouster urged





A union-affiliated pension plan wants the board to replace Angelo Mozilo and add two independent directors.





<p><a href="http://www.latimes.com/business/la-fi-mozilo20oct20,1,4707081.story?coll=la-headlines-business&ctrack=5&cset=true">http://www.latimes.com/business/la-fi-mozilo20oct20,1,4707081.story?coll=la-headlines-business&ctrack=5&cset=true</a></p>
 
Here was my Google alerts for Countrywide in the latest email:





<p>Google News Alert for: <strong>cfc</strong></p>

<p style="width: 600px;"> <a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://www.247wallst.com/2007/10/the-calls-for-a.html" style="color: blue;"> The Calls For A Lynching of Countrywide's (<strong>CFC</strong>) CEO Increase</a>


24/7 Wall St. - New York,NY,USA


The SEC has begun to look into the pattern of Mr. Mozilo's stock sales before the collapse of the sub-prime mortgage market and the <strong>CFC</strong> stock. <strong>...</strong>


<a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://news.google.com/news?hl=en&ncl=http://www.247wallst.com/2007/10/the-calls-for-a.html"> See all stories on this topic</a> </p>

<p style="width: 600px;"> <a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://www.reuters.com/article/companyNewsAndPR/idUSN1736385920071017" style="color: blue;"> SEC probing Countrywide CEO stock sales: report</a>


Reuters - USA


NEW YORK (Reuters) - The Securities and Exchange Commission has opened an informal probe into stock sales by Countrywide Financial Corp (<strong>CFC</strong>. <strong>...</strong>


<a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://news.google.com/news?hl=en&ncl=http://www.reuters.com/article/companyNewsAndPR/idUSN1736385920071017"> See all stories on this topic</a> </p>

<p style="width: 600px;"> <a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://www.businessweek.com/ap/financialnews/D8SBDQA80.htm" style="color: blue;"> SEC probes Countrywide CEO's stock sales</a>


BusinessWeek - USA


By MARCY GORDON The man who nearly 40 years ago co-founded what is now the nation's largest mortgage lender is being scrutinized by federal securities <strong>...</strong>


<a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://news.google.com/news?hl=en&ncl=http://www.businessweek.com/ap/financialnews/D8SBDQA80.htm"> See all stories on this topic</a> </p>

<p style="width: 600px;"> <a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://www.marketwatch.com/news/story/sec-investigating-countrywide-ceos-stock/story.aspx?guid=%7B9E0F8618-91C8-4028-9AC7-28AC4933FCF8%7D" style="color: blue;"> SEC probes Countrywide CEO's stock sales - WSJ</a>


MarketWatch - USA


By John Letzing, MarketWatch SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission has opened an informal investigation into stock sales <strong>...</strong>


<a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://news.google.com/news?hl=en&ncl=http://www.marketwatch.com/news/story/sec-investigating-countrywide-ceos-stock/story.aspx%3Fguid%3D%257B9E0F8618-91C8-4028-9AC7-28AC4933FCF8%257D"> See all stories on this topic</a> </p>

<p style="width: 600px;"> <a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://www.abcnews.go.com/Business/story?id=3742910" style="color: blue;"> SEC Examining Countrywide CEO Stock Sales</a>


ABC News - USA


By MARCY GORDON AP Business Writer WASHINGTON (AP) -- The Securities and Exchange Commission is examining sales of company stock by the chief executive of <strong>...</strong>


<a onclick="return top.js.OpenExtLink(window,event,this)" target="_blank" href="http://news.google.com/news?hl=en&ncl=http://www.abcnews.go.com/Business/story%3Fid%3D3742910"> See all stories on this topic</a> </p>
 
<p>Looks like Countrywide is really getting desperate. . .it is actually going to renegotiate some loans.</p>

<p><a href="http://www.cnbc.com/id/21431974">www.cnbc.com/id/21431974</a></p>

<p>"Unprecedented t"Unprecedented times call for unprecedented remedies," Chief Operating Officer David Sambol said in a statement. "We are determined to assist borrowers imes call for unprecedented remedies," Chief Operating Officer David Sambol said in a statement. "We are determined to assist borrowers."</p>

<p>(So touching. .. Countrywide cares. . . Maybe that should be slogan for their next wristband.)</p>

<p>Analysis of Countrywide's move.</p>

<p><a href="http://www.cnbc.com/id/21435367">www.cnbc.com/id/21435367</a></p>

<p class="textBodyBlack">"This all sounds good, but I’m still wondering why this, why now? Well I got an email this morning from Janet Tavakoli of Tavakoli Structured Finance. She practically eats mortgage data for lunch. She says Countrywide may seem like it’s doing this out of the goodness of its big ol’ corporate heart, but really it has to do with the fact that recoveries on subprime loans are far worse than ever anticipated so far. Here’s what she writes: </p>

<p class="textBodyBlack"><em>“Last week I met with a major mortgage servicer of geographically diverse U.S. subprime loans. They work 13-hour days trying to salvage what they can, doing anything to avoid reporting a delinquency or foreclosure. <strong>They disclosed disturbing information unavailable even on trustee reports. The servicer asserted the rating agencies are incorrect in their optimism; recovery rates of 60% are unattainable. My average recovery rate assumption of 30% is also currently unattainable</strong>.” </em></p>

<p class="textBodyBlack"><strong>Tavakoli says the servicer has been selling loans for 3-6 cents on the dollar. What are the issues? Legal costs relative to the low loan balances are huge and delays are long. Values of the homes are nowhere near what they were, so they’re looking at negative equity</strong>."</p>

<p class="textBodyBlack"> </p>
 
<p>In total Countrywide's <a href="http://biz.yahoo.com/ap/071023/countrywide_workouts.html?.v=3">plan </a>would reach out to about 82,000 borrowers for some kind of relief.</p>
 
So far, it is a "plan", and that is all. It will be interesting to watch and see if Countrywide actually helps out anybody in trouble.
 
They are using a bit of slight of hand here by publishing the 82k borrowers they would help but if you look at the $16bil number that is a very tiny slice of the pie. I looked at 3 of the 34 subprime MBS deals from 2005 (which would be due to reset as most of the loans are a 2 year ARM) and in just those three $200mil was 30 or 60 days late. If I were to look at all 34 $16bil would not even be enough to help cover half of their 2005 subprime portfolio. While the idea sounds like a good deed it really won't make much of difference.
 
<p>Another Fun CFC Factoid</p>

<p>Of the option ARMs it issued last year, <strong>91% were "low-doc" mortgages in which the borrower didn't fully document income or assets</strong>, according to UBS, compared with an industry average of 88% that year. In 2004, 78% of Countrywide's option ARMs carried less than full documentation. </p>

<p>And the stock is just getting hammered this morning on all the good news about housing. Down 8% Below $ 14.00 </p>
 
To go along with what bltserv just said, "UBS AG prepared an analysis for the WSJ showing that 3.55% of option ARMs originated by Countrywide in 2006 and re-packaged into mortgage-backed securities are at least 60 days past due, the newspaper said. That compares with an average option-ARM delinquency rate of 2.56% for the industry, the WSJ noted. "





http://tinyurl.com/yqs6yb
 
I think I will have to take a look at some of their option ARM MBS deals today.





How much of a percentage of the loans do you think are California loans are in these option ARM MBS deals?
 
Found this link on patrick.net:





<a href="http://countrywide-foreclosures.blogspot.com/2007/10/countrywide-financial-reos-off-charts.html?ref=patrick.net">http://countrywide-foreclosures.blogspot.com/2007/10/countrywide-financial-reos-off-charts.html?ref=patrick.net</a>





Here's a list of all CA Countrywide REOs:





<a href="http://www.streamfx.com/CW/10-23-2007/REO-California.html">http://www.streamfx.com/CW/10-23-2007/REO-California.html</a>
 
My take on Countrywide's $16 bil helping hand: This is just an advertisement from Countrywide directed at those who may be having problems with their mortgages. It is designed to incur fees and commissions and will only "help" those who already are able to agency qualify. And when the critics start howling, Countrywide will respond with, "It is not our fault. It is Fannie and Freddie who set the standards."
 
<a href="http://www.housingwire.com/2007/10/24/behind-the-mortgage-mod-push-a-fractured-secondary-market/">Here is what HW thinks.</a>


<a href="http://www.reuters.com/article/reutersEdge/idUSN2244667820071024?sp=true">


And here is the Reuters article that he cites.</a>
 
This might explain why CW's servicing arm is the piece everyone is interested in (note, however, that the entity at issue in the article is not CW): <a href="http://www.creditslips.org/creditslips/2007/10/what-do-phone-s.html#more">Mortgage Servicing and Phone Sex.</a>
 
Well I am going to guess that the news coming out tomorrow on "Country Fried" wont be too good. The stock is tanking this morning. Taking a 10% haircut in just a few hours of trading. Its @ $ 12.50. I will make the prediction of under $ 10.00 by the close tomorrow after Mozillo makes some stupid comment on the conference call. Within a few weeks it will be delisted from the SP500 as it spirals into oblivion.
 
<p>Analysts are shooting for a loss of $600 million this quarter.</p>

<p>In comparison, last quarter they earned $480M. A swing of a $1billion.</p>
 
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