[movermike] movermike: More Mortgage Company News

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Posted by movermike:
More Mortgage Company News
http://www.movermike.com/posts/1186707211.shtml


   When it comes to your financial information, I learned long ago, one
   rule is to "never let them see you sweat!" Well Countrywide Financial
   (CFC) just violated that rule.

   [cfc]

   The WSJ's [1]James R. Hagerty writes this evening that s CFC SEC
   filing says

     Countrywide Financial Corp. faces "unprecedented disruptions" in
     debt and mortgage-finance markets that could hurt earnings and the
     company's financial condition...([2]Read the SEC filing)

     [...]

     In a sign of the growing difficulty in selling loans, Countrywide
     said that it transferred $1 billion of nonprime mortgages from its
     "held for sale" category to "held for investment" in the first
     half. Countrywide marked the value of those loans down to $800
     million.

   [3]Reuters, on Monday, reported that the cost to insure their mortgage
   debt, Countrywide's default swaps, increased

     100 basis points to 445 basis points, or $445,000 per year for five
     years to insure $10 million in debt, according to data from CMA
     DataVision.

     Debt-protection costs of Countrywide, the largest U.S. mortgage
     lender, have doubled from 210 basis points on Thursday...

   When

     [4]MBIA Inc. the world's largest bond insurer, said on a conference
     call today (Thursday) that rising loan delinquencies in three
     transactions it insured for Calabasas, California-based Countrywide
     have tripped protection triggers.

   [5]Radian Group Inc. (RDN) - The company's customers include mortgage
   originators, such as mortgage bankers, mortgage brokers, commercial
   banks, and savings institutions; and financial institutions. The stock
   price has not fared well

   [rdn]

   In February of 2007, Radian then $60 per share, agreed to merge with
   MGIC. Then problems with [6]C-BASS surfaced and the merger is no
   longer certain. According to the 10-Q filed today:

     On August 7, 2007, MGIC publicly announced that it had advised the
     New York Insurance Department that it was MGIC management's
     preliminary assessment that MGIC is not obligated to complete the
     merger in light of the C-BASS impairment.

     [...]

     On August 7, 2007, in response to MGIC's public comments on the
     status of the merger as discussed above, S&P placed the insurance
     financial strength ratings of our mortgage insurance subsidiaries
     on CreditWatch with negative implications and placed the credit
     rating of Radian Group on CreditWatch Negative. S&P commented that
     its ratings for Radian Group and its mortgage insurance
     subsidiaries would likely be removed from CreditWatch and affirmed
     if the merger is completed...

   Who knows where or how wide the ripples will travel!

   [7]Countrywide+Financial+(CFC) [8]Countrywide's default swaps
   [9]Radian Group Inc. (RDN) [10]Mortgages [11]Mover Mike

References

   1. http://online.wsj.com/article/SB118670096225293580.html?mod=djemalert
   2. http://sec.gov/Archives/edgar/data/25191/000110465907060931/a07-19124_110q.htm#Partii_OtherInformation_173217
   3. http://biz.yahoo.com/rb/070806/countrywide_swaps.html?.v=2
   4. http://www.bloomberg.com/apps/news?pid=20601087&sid=aG56gYigx4PM&refer=home
   5. http://finance.yahoo.com/q/pr?s=RDN
   6. http://www.movermike.com/posts/1186013901.shtml
   7. http://technorati.com/tag/Countrywide%20Financial%20(CFC)
   8. http://technorati.com/tag/Countrywide's+default+swaps
   9. http://technorati.com/tag/Radian+Group%20Inc.+(RDN)
  10. http://technorati.com/tag/Mortgages
  11. http://technorati.com/tag/Mover+Mike