Mortgage Market Update: Countrywide in Free-Fall

I’ve really enjoyed the stock market run the past few weeks. Reading about the Dow crossing 14K was fun. I can’t even run the 10K very well and here was the Dow crossing 14K (ha ha ha.. you’re supposed to laugh). Anyways, today’s news isn’t good. The market fell sharply today partly due to housing woes. In fact Countrywide’s quarterly profits fell 33%. And even McDonalds reported a loss in its quarterly report. Here is what Countrywide said (MSN Money):

…even its better customers are having problems making their monthly mortgage payments. CEO Angelo Mozilo added to the gloom when he said he didn’t see the real estate market nationally recovering before 2009, a sentiment that echoes comments from some home builders.

I know the market is very volatile right now. The mortgage market is experiencing a very strong contraction. In fact Countrywide’s CEO expects the number of major lenders to fall from ten to five. A lot of lenders have gone out of business and will continue to do so, the housing oversupply in the valley is another major concern. I’m not trying to say the sky is falling, but a lot of people are losing jobs right now.

One industry vet who has been around for almost twenty years said this is the worst she had seen it in a long time. I guess she must’ve started in the late 1980s. I just don’t remember what the US mortgage market was like when I was in high school.

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