Countrywide Revises MBS Gain-on-Sale Timing

Countrywide Financial Corp., Calabasas, Calif., has revised the timing for gain on sale from certain mortgage-backed securitizations originally recognized during 2004 in a move the company said will slightly reduce its earnings for that year and increase them by an equal amount for the first quarter of this year."The net effect of the change is a reduction in 2004 earnings of $0.20 per diluted share, to $3.63 per diluted share (compared to previously announced unaudited 2004 earnings of $3.83 per diluted share), and a corresponding increase of approximately $0.20 per diluted share to be recognized in the first quarter of 2005," Countrywide reported. The company said the change "applies to unaudited financial results for 2004 that have been reported by Countrywide, and does not apply to any previously issued financial statements." Countrywide made the change because its independent auditor, KPMG LLP, has informed the company that it reported certain mortgage-backed security sales too soon. The company said it believed at the time that it was reporting the transactions in compliance with all applicable accounting principles. Countrywide can be found online at http://www.countrywide.com.