Countrywide feels the crunch

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.

Your thoughts?
Photo Credit: Reuters

Comments

[JR]

Man, does he have a great tan or what? Looks like the troubles in the housing market have not cut into Angelo's time on the course.

[Jet]

I posted this on the previous blog but i think it should be here:

Have you seen most of the news today? Well, its mostly on housing and its not looking good. IT'S REALLY BAD!!! Some people really thinks that it will be a ripple affect and I think they know that it will happen but not expecting it to happen soon. I think the time has come. Some people are now saying recovery will be in 2009. I dont think so. I have a gut feeling 2012-2015 could be the right estimate UNLESS the stock market crashes(since most of the mortgages are loaned from wall street) and a recession goes with it. I still hope everything will run smoothly without recession or market crash so we'll have to wait and see.

Note: It took Japan a longggggggg time before houses recovered. So 2012-2015 is just a conservative estimate.

[jung]

Kool that's perfect timing for me!

[Inland Empire]

So let's assume he is right on in his prediction. How many would-be home buyers out there will either have swooped in for the kill by picking up a reduced price repo home now or in the near future OR have saved enough money to purchase something by 2009? I think most of the people who are in the wait mode will still be hovering and whinning about prices. They won't benefit from the recovery because they will still be caught up in the drama.
Real estate is like a train; you decide when to get on.