Countrywide posts 4th-quarter loss

NEW YORK – Countrywide Financial Corp , the battered mortgage lender being acquired by Bank of America Corp, posted a $422 million fourth-quarter loss toda y, hurt by mounting defaults in a sinking housing market.

The net loss totaled 79 cents per share, and compared with a year-earlier profit of $622 million, or $1.01 per share.

Countrywide, the largest U.S. mortgage lender, on Oct. 26 projected a fourth-quarter profit of 25 cents to 75 cents per share. It had not updated that forecast even as the housing market deteriorated. The company’s $1.2 billion third-quarter loss had been its first quarterly loss in 25 years.

Analysts on average expected a loss of 32 cents per share for the fourth quarter, according to Reuters Estimates.

“While considerably improved from the previous quarter, [results] were adversely impacted by further credit deterioration across the industry and continued illiquidity in the secondary mortgage markets,” Chief Executive Angelo Mozilo said in a statement.

Bank of America, the second-largest U.S. bank, on Jan. 11 agreed to buy Countrywide in a transaction that on Monday valued the mortgage lender at about $4.3 billion.

The transaction valued Countrywide at $7.16 per share, but shares of Countrywide have since declined on speculation that Bank of America might seek to renegotiate the purchase. The bank has repeatedly denied that prospect. Chief Executive Kenneth Lewis on Jan. 15 said the bank conducted “the mother of all due diligences” before agreeing to buy Countrywide.

Countrywide shares closed Monday at $5.95. They have fallen 86 percent in the last year.

Countrywide said it is not holding a conference call to discuss results, citing the Bank of America merger. Lewis is scheduled to speak later today at a Citigroup financial services conference.