Countrywide Loses $893M
Countrywide Financial Corp. here took $3 billion of credit-related charges in the first quarter, widening the company's loss well above Wall Street expectations.
The company lost $893 million, or $1.60 per share, in the quarter. Analysts on average had forecast near break-even results, according to Thomson Financial.
But there is little in the company's first-quarter financial report that would raise doubts about Bank of America's planned acquisition of Countrywide. And some think the big charges are part of a housecleaning that could ease the merger.
The credit costs hit both Countrywide's mortgage banking unit, which lost $552 million in the quarter, and bank, which lost $960 million. Countrywide posted small profits from its capital market and insurance units.
The company's mortgage production business remains robust, despite the generally weak market and the tightening of underwriting standards.
Countrywide produced $73 billion of loans in the first quarter, down from $117 billion in the first quarter of 2007, but up from $69 billion in the fourth quarter. The company's average daily loan application volume was up 27% from the fourth quarter.
Because of credit-spread widening on non-agency fixed-rate loans during the first quarter, Countrywide wrote down the value of these assets by $188 million. (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/