One in three sub-prime mortgages delinquent

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Here’s a shocking (no irony intended) piece of news from Countrywide Financial this morning: ‘Countrywide Financial, the largest U.S. mortgage lender, Tuesday said more than one in three sub-prime mortgages were delinquent at year-end...’ Countrywide said borrowers were delinquent on 33.64% of sub-prime loans it serviced as of Dec. 31, up from 29.08% in September, and that said borrowers were at least 90 days late on payments on 17.25% of sub-prime mortgages.

Now, here’s a shocking (irony intended) piece of news from Countrywide: The company reported a loss of $422 million, or 79 cents a share, for the fourth quarter. No big surprise here, but the loss was deeper than analysts expected, and Countrywide’s most recent guidance had been that it would make a profit in the fourth quarter.

In announcing a $1.2 billion loss in the third quarter, Countrywide said that would be the bottom: ‘We view the third quarter of 2007 as an earnings trough, and anticipate that the Company will be profitable in the fourth quarter and in 2008,’ Countrywide president David Sambol said in a press release on Oct. 26. ‘Over the longer term, we believe that prospects for the U.S. housing and mortgage markets, as well as for Countrywide, remain very attractive.’

The L.A.Times reports that, while Bank of America says it has every intention of continuing with its announced purchase of Countrywide, some investors are betting the deal will be renegotiated: ‘At Monday’s closing stock prices, Bank of America’s offer was worth $7.50 a share. But Countrywide stock was at $5.95, reflecting sentiment that the price could fall if Countrywide’s troubles persisted.’

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