Countrywide Posts $400+ Million Loss – Loan Production Tanks

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Countrywide reported that it lost $422 million last quarter while watching loan production sink nearly a third from $90 billion to $61 billion. This comes on the heals of an expected B of A takeover; the plans of which are to be unveiled today by Bank of America. Many believe that a poor performance by Countrywide could unwind the potential takeover.

From Market Watch:

The Calabasas, Calif.-based company swung to a loss of $422 million, or 79 cents a share, while provision for credit losses totaled $924 million, down from $937 million in the third quarter. Reserve for credit losses stood at $1.9 billion at the end of 2007, the company said.

Ken Lewis, Bank of America’s CEO is making a presentation later Tuesday and is expected to discuss the planned takeover of Countrywide. Analysts have speculated that a poor fourth quarter earnings report could nix the deal.

Also Tuesday, Countrywide said loan production in the fourth quarter plunged to $61 billion, down from $90 billion in the third quarter and from $118 billion in the year-ago fourth quarter.

“This decline reflects a smaller origination market, which is largely attributable to the tightening of underwriting and loan program guidelines throughout the industry, as well as economic conditions and the lack of liquidity for non agency-eligible loans,” the company said.

Can’t you see the B of A board of directors sitting back after the flurry of deal making with a nice dose of buyer’s remorse saying “do we really want this piece of crap?”