Countrywide lost $2.33 billion in second quarter

Countrywide Financial lost $2.33 billion in the second quarter, its new owner, Bank of America, reported today. From the New York Times: "Countrywide Financial, which Bank of America formally acquired on July 1, reported a net loss of $2.33 billion in the second quarter. That included just under $4 billion in losses tied to mortgages, home equity and other loans. But investors fear that those losses could spiral higher, and Bank of America could face billions in costs from protracted legal battles."

More: "But on Monday, Bank of America said that the deal was ahead of projections. Bank of America said it now expected Countrywide to bolster its 2008 profit after raising its projections for cost savings and making certain accounting adjustments."

Countrywide's recent earnings/losings history:

1Q 2007: Earned $434 million
2Q 2007: Earned $485 million
3Q 2007: Lost $1.2 billion
4Q 2007: Lost $422 million
1Q 2008: Lost $893 million
2Q 2008: Lost $2.33 billion

Posted by Peter Viles
Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.

Comments

[Fred]

The ARMs haven't even started resetting en masse, people! Don't you realize how bad this is going to get?

[Blackbox]

The blog has lost all credibility until they respond to the hack piece about the flippers in La Quinta. Sloppy reporting, but even more disturbing, nothing from the reporters on that story. They probably will ignore the mistakes, and hope that just move along.

Are we going to let them?????

[Pat]

Also, in the article about searching for homes on-line, the author was wiling to register for homegain.com (Tribue is part of the group that owns this site), but not willing to register for ziprealty.com. Part of the complaint against Zip Realty is the paucity of information available for non-registered users. However, homegain.com offers absolutely nothing to non-registered users. This double standard really detracts from the credibility of the piece.

[It All Happens on the Margin]

No mention in the online home search article about the lack of critical information on realtor.com and remax.com that is in sites like redfin and ziprealty:

- Days on Market ???
- Last sale price / sales history ???
- Price reductions ???
- Previously closed sales for comps ???

These are amongst the most important bits of info for a buyer, especially in a buyers market.

WTF, LAT?

[Tim K.]

Not to harp on Peter Hong for his article about the flippers getting back into the market, but I do agree with the other posters saying a follow up story is needed.

You could take this opportunity to report on just how easily well-intentioned research sometimes leads a good reporter astray. I have no doubt Mr. Hong was portraying the story as honestly as he could given the information he was presented, but sometimes fraudsters can fool the reporter, at least temporarily. A good follow up story will restore credibility to both Peter and the Times and will shed new light on the ever evolving housing market story - that even those who got burned in the past are trying to market themselves and turn a trick now. It'll be good reading!

[Nelcisco]

Can someone help me in understanding why BofA made this move to buy this loser company in the first place???

The more I read about this aquisition the more unclear I am about the whole thing. At BofA board meetings there can't be optimism about the future

[E]

flipper followup flipper followup

this address

81351 Fuchsia Ave
Indio, CA 92201

Here is what they say about the house on their site...

"We bought this from a VERY motivated seller for $200k and passed it on to an investor for $205k. He put $17k worth of repairs into and sold it for $289K within months!"

Now go check the address on Zillow and look at the sales history and tell me if they made a happy family of the "end user". Me-thinks the end user was foreclosed upon.

I'd like to know

1. Where are these people getting the financing for their homes. Especially with the info that OCRenter dug up.

2. When the homes end up with the final people, who does their mortgage? Do the flippers have lenders that put people into bad loans? Maybe you can track down the owner (the last owner) of the Fuchsia Ave house to see what exactly the terms of the deal are and if they would do business with Kurtis and Cindy whatever.

3 I'd bet that if you looked at the sales history of the above house YOU would have some questions also.

[SidelinedBuyer]

I agree with the complaints about the online-home-search piece. Registering with ZipRealty is free and just for the sake of thoroughness you'd think the reporter would register and see what additional info you get. I use ZipRealty a lot and it has tons of useful information.

The other interesting omission in the article was that they never even mention the MLS service that most of these sites use as the primary or only data source.

Overall a very sloppy piece of journalism.

[Laker]

E,
The "end user" is very likely a straw buyer or one of those buyers that was sucked in using the street signs: "WE BUY HOUSES FOR CASH" or "BUY THE HOUSE 0 DOWN, BAD CREDIT OK, NO CREDIT OK" or "WHY RENT IF YOU CAN OWN"

You don't need to be very knowledgeable or extra smart to check that street and realize that such a house is worth about $100,000. That is the value of it, and that is the reason the place foreclosed. It was a hot potato that got thrown and the last sucker got burned.
If those flippers could find me such a shack indio for $50,000, then i will buy it from them and join the program. Buying over inflated dog house in crack land, with the hope to find a bigger sucker is a crazy bet.
Only good for "specuvestors".