Terrible Tuesday: What Happened At Countrywide? Lender Denies Rumors of An FBI Raid

More housing news on a newsy day from Tom Petruno, who files early for LATimes.com and informs us of two developments worth noting:

Up the road in Calabasas: "One market rumor had the FBI raiding offices of Calabasas-based mortgage giant Countrywide Financial Corp. The company called the reports "unfounded," but its stock slid 2.6%."

More on the company run by Angelo Mozillo (pictured): "In an e-mailed statement the company said: 'Countrywide has become aware of reports today that federal investigators have raided one or more of our offices. We are unaware of any such activity taking place and at this time we believe these rumors to be unfounded.'"

And down the road in Newport Beach:  "Bill Gross, the Newport Beach-based bond fund guru at PIMCO, cast more aspersions on the market for bonds backed by high-risk mortgages, likening them to hookers who lured credit-rating firms and investors with an attractive come-on."

More: "In a commentary on Pimco's website, he also reiterated his view that the financial woes of homeowners with sub-prime mortgages would further drag down the U.S. economy over the next year or so."

We encourage you to read the whole Gross commentary here -- Gross is one of our favorites, and we're always bragging about his writing. Bearish? Yes he is:  "Mortgage payments are going up, up, and up…and so are delinquencies and defaults. ... Currently 7% of subprime loans are in default. The percentage will grow and grow like a weed in your backyard tomato patch. Now I, the curmudgeon of credit, am as sure of this as I am that the sun will set in the west. The uncertain part is by how much."

Comments? Certainly you have something to say about Countrywide.
Photo: Countrywide CEO Angelo Mozillo, by Reuters

Comments

[Dave]

I'm sick and tired of this mess. Why do people that bought something that they couldn't afford get bailed out? I.E. somone shoehorns themselves into a million dollar house on a 50k a year income.

I work my #@$ off and make my payments on time and no one is standing in line to help me with my bills!!! Why should my (or anyone elses) tax money go to bail out people who bought in like a teenager with a platinum visa card?... shouldn't stupid hurt?

Companies like CHL, JP Morgan, Citibank and BofA should have known better (some of them have been inbusiness for over 100years!!). Noone in this debacle is innocent! They are edgucated experienced people that should have known better than to finance a 20 year old for a million dollars based on an inflated FICA score.

Use my tax money to help schools or build a pyramid in the desert, but stop throwing it away to people that continue to make the same mistakes because there are no consequences for being stupid!!!