<a href="http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20080129&id=8105059">Countrywide posts loss as late payments mount</a>
<p> NEW YORK (Reuters) - Countrywide Financial Corp , the battered mortgage lender being acquired by Bank of America Corp , posted a larger-than-expected fourth-quarter loss on Tuesday, as a sinking housing market caused more borrowers to fall behind on payments.</p>
<p> The net loss totaled $421.9 million, or 79 cents per share, and compared with a year-earlier profit of $621.6 million, or $1.01 per share.</p>
<p> Countrywide failed to return to profitability after on October 26 projecting a quarterly profit of 25 cents to 75 cents per share. Analysts on average expected a loss of 32 cents per share, according to Reuters Estimates.</p>
<p> Shares of Countrywide rose 41 cents to $6.36 in pre-market electronic trading.</p>
<p> Calabasas, California-based Countrywide said borrowers fell behind on payments on more than one in three subprime mortgages in its $1.48 trillion servicing portfolio.</p>
<p> The 33.64 percent delinquency rate was up from 29.08 percent at the end of September. Late payments also rose on traditional mortgages and home equity loans. Countrywide set aside $907 million for bad loans, up from $70.8 million a year earlier, and wrote down $831 million for prime home equity loans. Restructuring charges totaled $87 million.</p>
<p> "(Results) were adversely impacted by further credit deterioration across the industry and continued illiquidity in the secondary mortgage markets," Chief Executive Angelo Mozilo said in a statement.</p>
<p> For all of 2007, Countrywide lost $704 million, or $2.03 per share, its first annual loss in more than 30 years.</p>
<p> Bank of America, the second-largest U.S. bank, on January 11 agreed to buy Countrywide for $7.16 per share, a transaction that on Monday valued the lender at about $4.3 billion.</p>
<p> Shares of Countrywide have since declined on speculation that Bank of America might renegotiate the purchase. The bank has repeatedly denied that prospect. Chief Executive Kenneth Lewis on January 15 said the bank conducted "the mother of all due diligences" before agreeing to buy Countrywide.</p>
<p> Countrywide shares closed Monday at $5.95. They have fallen 86 percent in the last year. The company said it is not holding a conference call to discuss results, citing the Bank of America merger. Lewis is scheduled to speak later Tuesday at a Citigroup financial services conference. </p>
<p> PROBES, LAWSUITS</p>
<p> Countrywide and Mozilo have become targets for what critics call lending excesses that fueled a housing meltdown, and worries the U.S. economy may enter a recession.</p>
<p> On Tuesday, RealtyTrac said U.S. foreclosure filings in 2007 rose 75 percent form a year earlier, with more than one-fifth coming in California.</p>
<p> Countrywide cut about 11,000 jobs, or 18 percent of its work force, from August to December, as it stopped making most riskier home loans to focus on less profitable mortgages that Fannie Mae and Freddie Mac can buy. Loan volume fell 44 percent to $69.2 billion.</p>
<p> Countrywide said it helped more than 81,000 borrowers restructure their mortgages last year, with more than twice as many workouts in the second half of the year.</p>
<p> Mozilo has also been faulted for collecting hundreds of millions of dollars from pay and stock options from 2002 through 2007, including after the housing crisis began. On Monday, he said he would forfeit $37.5 million of severance and other perks to which he was entitled upon his retirement.</p>
<p> Countrywide also faces a wide variety of investigations into its lending practices, lawsuits from shareholders and borrowers, and a U.S. Securities and Exchange Commission probe into Mozilo's stock sales. Mozilo has denied wrongdoing.</p>
<p> (Reporting by Jonathan Stempel; Editing by Dave Zimmerman)</p>
<p>Copyright 2008 Reuters</p>
