Timeline: The Countrywide Crisis
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Countrywide deserves the big story treatment, and the big story treatment includes a blog timeline -- highlights of our previous Countrywide posts:
April 28: The LATimes reports that Countrywide CEO Angelo Mozilo took home $120 million last year, and $284 million over the past two years. The Countrywide Foreclosure blog reports Countrywide owns 7,610 foreclosed houses.
May 21: Mozilo tells Reuters government regulation is hurting the mortgage industry: ‘ When they attacked the pay option and interest-only loans, that really put a dent in a lot of the product, which is perfectly good product,’ he says.
May 22: Mozilo claims borrowers have been pressuring lenders: ‘They put a lot of pressure on us to make them loans,’ he says.
June 14: Business Week breaks what turns into a very big story: it reports that redemptions have been frozen at an obscure Bear Stearns hedge fund that invested in sub-prime mortgages.
June 26: Countrywide issues a statement denying stock market rumors that the FBI has raided some of its offices.
June 30: The Federal Reserve issues new, tighter, lending guidelines.
July 24: Influential bond fund manager Bill Gross writes that the sub-prime meltdown is not contained, and is in fact causing a wider credit squeeze.
July 24: Countrywide reports a 33% decline in profits, signals that defaults are spreading beyond sub-prime borrowers, slashes its profit outlook for the rest of the year and predicts the housing market will not recover until 2009.
August 10: In an SEC filing, Countrywide says it faces ‘unprecedented disruptions’ because investor demand for mortgages has evaporated.
August 15: Merrill Lynch downgrades Countrywide to ‘sell,’ raising the possibility of bankruptcy if the credit squeeze worsens. The downgrade comes on the heels of Countrywide’s own report that defaults on its loans are rising.
August 16: Countrywide issues a statement saying it is drawing on an $11.5 billion credit facility and tightening lending standards. Fitch ratings downgrades its debt, and Countrywide shares tumble again. The Countrywide Foreclosure blog reports Countrywide now owns 10,796 foreclosed houses.