Countrywide's 2Q Profits Down

Countrywide Financial Corp., Calabasas, Calif., has reported consolidated net earnings of $566 million ($0.92 per share) for the second quarter, down 28% from $786 million ($1.29 per share) in the second quarter of last year.Pretax earnings by the company's mortgage banking operations totaled $526 million, down from $1.0 billion a year earlier. However, loan production in the mortgage banking segment increased to $101.15 billion, compared with $78.75 billion in the first quarter and $88.49 billion a year earlier, Countrywide reported. "Production sector margins decreased from 93 basis points for loans produced in the first quarter of 2005 to 40 basis points in the second quarter as a result of various factors," said Angelo R. Mozilo, Countrywide's chairman and chief executive officer. "These include lower pricing margins in prime and nonprime loans; a shift in channel mix toward the lower-margin correspondent channel; and ... the decision to increase loan retention during the second quarter." Countrywide's mortgage servicing portfolio stood at a record $964 billion as of June 30, a 33% increase from that of a year earlier. The company can be found online at http://www.countrywide.com.