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The Dow Jones Industrials Average that tracks the most important stocks on Wall Street is down almost 230 points today coming off the back of a Countrywide earnings call where the company reported several unnerving items to investors:
- It had a terrible quarter as expected and announced long-term guidance downward (also as expected)
- Losses were due to costs associated with prime home equity loans
- Stated that they are “seeing home price depreciation not seen since the Great Depression“
Those last two will spook any investor. Countrywide is the first to admit to problems in the prime arena; and could be the end of the “containment” theory once and for all. As we have long said at Blown Mortgage; FICO scores do not make your mortgage payments. Higher payments, higher home-expense, less equity to liquidate to fuel unsustainable lifestyles, and fixed or reduced incomes weigh even on the best credit borrowers – stay tuned.
Thanks to the Mortgage Lender Implode-O-Meter Premium Service for the tip.
Last 3 posts by Morgan
- Subprime Bananas - June 28th, 2009
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- Goldman bonuses largest in firm's 140-year history - June 21st, 2009
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July 28, 2007 at 8:24 pm
[...] especially when it comes to 2nd mortgage liens and equity lines of credit. They admitted as much in their ...