Countrywide sees ‘unprecedented disruptions’

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Good morning. We aim to keep this blog focused on Los Angeles, but at the moment, turmoil in financial markets is the story driving local real estate. If investors continue to shun mortgage-backed securities, mortgages loans will not be easily available. So we begin today with more turmoil:

Countrywide Financial said it faces ‘unprecedented disruptions’ because investor demand for mortgages has dropped sharply. LATimes: ‘The Calabasas-based lender said in a regulatory filing that the market turmoil has forced it to hang on to more mortgage loans than it would like...’ Bloomberg: ‘’The secondary market and funding liquidity situation is rapidly evolving, and the potential impact on the company is unknown,’ Countrywide said in an SEC filing. ‘These conditions may continue or worsen in the future.’’

The Federal Reserve on Friday morning again pumped liquidity into financial markets: ‘The Fed, in a short statement, said it will provide ‘reserves as necessary’ to help the markets safely make their way. The central bank did not provide details but said it would do all it can to ‘facilitate the orderly functioning of financial markets.’ You can read the entire Fed statement here.

Photo Credit: Countrywide CEO Angelo Mozilo, by Reuters
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