Nonprime Declines at Countrywide

Nonprime loan fundings at Countrywide Financial Corp., Calabasas, Calif., totaled $2.6 billion in February 2007, down from $2.8 billion in February 2006.Home equity loan fundings fell 13% to $3.0 billion from $3.4 billion the year before. Countrywide funded $2.4 billion in pay-option loans during February, down from $6.0 billion the year before. The company said the above categories were not mutually exclusive. Overall, it produced $35 billion for the month, up from $31 billion in February 2006. Originations for home purchases declined to $12.6 billion from $13.6 billion the year before, while "non-purchase" originations increased to $22 billion from $17.7 billion in the same time frame. David Sambol, Countrywide president and chief executive, said, "In response to market factors, management has implemented changes to our origination policies to mitigate future exposure including further tightening of underwriting guidelines. Nonprime fundings were only 7% of total mortgage loan fundings in February and recent nonprime application volumes have declined as a result of our recent policy changes." He added because of the issues in the subprime market, Countrywide might experience short-term earnings volatility. Investors punished the company's stock, driving it down $0.99 in one day as of 12:22 p.m.