Countrywide feels the crunch

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There is a lot of news today on the housing market, all of it indicating the market continues to deteriorate.

Countrywide is still making money ($5 million in profits per day), but profits are falling, investors are disappointed, and what the company sees in the housing market is not good. The L.A. Times: ‘The nation’s biggest mortgage lender signaled that rising defaults and delinquencies are spreading beyond the troubled subprime market to higher-quality ‘prime’ loans. ... The Calabasas-based company reported a 33% drop in its second-quarter profit and slashed its outlook for the rest of the year, citing an ‘increasingly challenging’ housing market.

The Reuters headline from the conference call featuring Countrywide Chief Executive Angelo Mozilo, pictured, is: ‘Countrywide CEO: No housing recovery before 2009.’

A couple of notes: Nobody is in a better position to understand the housing market -- Countrywide is the nation’s largest mortgage lender. The news here is the spread of trouble (defaults and delinquencies) beyond the subprime market. ‘Increasingly challenging’ means the problem is getting worse.

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Photo Credit: Reuters