Countrywide: Housing Market Continues to Soften, Defaults Rise
Submitted by
CalculatedRisk on Mon, 07/16/2007 - 5:59am (25 comments)
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You're my hero!
Welcome back ?
How was your weekend ? what Mountain. My favorite for this time of year is around Karson Pass on highway 88.
giacutter and Yal, thanks for the welcome back. I was hiking near Horseshoe Meadow in the southern Sierras.
It is amazing how dry the Sierras are this year. All the seasonal streams were dry (not unexpected), but I was shocked to find many of the "year round" streams dry too (or with only standing brackish water). At least that meant there were very few bugs.
As always, it was great being in the mountains.
Best to all.
Hi CR,
Sad news. Have not been there (and in Ca.) for few years now. This time of year in the high part from Rock Creek lake to Withney used to be melting ice , best for flowers (lots of bugs).
Yaaaay!!!!!
CR's back.
FPA News Article
It's completely understandable how this could have been "missed.":)
NEW YORK, July 16 (Reuters) - As the U.S. housing slump claims dozens of mortgage lenders, Countrywide Financial Corp (CFC.N: Quote, Profile, Research) is growing bigger.
The largest U.S. mortgage lender on Monday said it has added nearly 5,800 jobs this year, and boosted overall lending despite making fewer risky "subprime" loans as foreclosures more than double.
Calabasas, California-based Countrywide said it ended June with 60,427 employees, up from 59,011 in May and 54,655 at year end. It has added jobs every month this year.
June home loan fundings rose 4 percent from a year earlier to $45.26 billion, though subprime and other "nonprime" loans tumbled 55 percent to $1.85 billion. Countrywide's loan servicing portfolio swelled 18 percent to $1.42 trillion.
Full story at:
UPDATE 3-Countrywide June loans rise, adds 5,800 jobs in '07
| Reuters
S.
CR, Welcome back to the bizarro world of suspended disbelief. And just in time too!
PPI & CPI up tomorrow and Wed. Concensus numbers I am seeing seem a little low coming in at .1% core and .2 overall for both. Doesn't seem to reconcile with what I am seeing. Airlines all inserted big fare increases in June, with SWA hiking a lot as their fuel hedges expire. All others following suit as they were the price driver in a lot of markets. Food, energy, ... everything.
Are these concensus numbers in line with what you are anticipating?
Incidentally- I don't know if people saw this late last week- It appears that somebody with too much money bought 13,000 $30 puts on Countrywide stock that are due to expire this Friday, July 20. Either somebody has way more money than brains or thinks they know something the rest of us don't.... hmm, I wonder...
Big Money Put on Countrywide To Crash — By Next Friday : HousingWire || financial news for the mortgage market
what's up with the Yuba gap slope south of I80--- it looks as though every tree was poisoned...
barely said: "...Airlines all inserted big fare increases in June, with SWA hiking a lot as their fuel hedges expire. All others following suit as they were the price driver in a lot of markets. Food, energy, ... everything."
"Air travel" isn't listed among the weighted components in the CPI. Also, food and energy have volatile but low weightings. That's why the core CPI (ex. food and energy) gets so much attention.
Here are the weightings:
Indicators & Data ::
Federal Reserve Bank of Cleveland
S.
my homeowners insurer Allstate stopped adding new policies here in California recently b/c of the increased fire risks. we've had 2 recent large fire outbreaks in the last 2 wks. i think this summers corn crops are going to be adversely affected as is being reflected in my crop stocks.
Sebastian,
You are wrong. Cleveland Fed does not publish CPI. BLS handbook of methods. Appendix 4. Weights CPI-U
- Transportation
-- Public Transportation
--- Airline fare 0.649
Of course I don't hold my breath because owners', e.g., equivalent rent has weighting of 23.830.
sarcasm
We don't have to worry about inflation - everything is contained! Plasma TV's are getting cheaper, so eat them instead of food! Can I fill my gas tank with Plasma TV's instead of gas? Hmmm...
end sarcasm
Sebastian,
from the Reuters article: Countrywide said pending foreclosures as a percentage of unpaid principal rose to 0.96 percent from 0.45 percent a year earlier, and 0.90 percent in May.
Delinquencies, meanwhile, rose to 4.98 percent, a six-month high, from May's 4.71 percent.
"It's definitely a worrying trend," Plesser said. "I expect many lenders to write down more loans in the second quarter." He rates Countrywide "hold."
Funny that you would leave this part off. I guess it doesn't pay to finish the article, eh, Seb?
poszi said: "Sebastian,
You are wrong. Cleveland Fed does not publish CPI. BLS handbook of methods. Appendix 4. Weights CPI-U
- Transportation
-- Public Transportation
--- Airline fare 0.649..."
Very well, I got that detail wrong. (I use the Cleveland Fed's weighting method in calculating my own Shadow CPI.)
Sebastia
Very well, I got that detail wrong. (I use the Cleveland Fed's weighting method in calculating my own Shadow CPI.)
Seb - do your 'shadow' results differ much from official? Just curious.
dotcommunist said: "Funny that you would leave this part off. I guess it doesn't pay to finish the article, eh, Seb?"
If the blogs here are going to deliberately take the bearish points out of context and leave out the bullish factors that can be found within the same story it diminishes the level of discussion that this blog supposedly "encourages."
If you look at CR's original post, the positives (including actual numbers, not just rhetoric) were at the top of the story. CR skipped down to the most-bearish part.
Here's the original link:
Expired
Whatever claims to reasonable, fact-based discussion this blog claims to have are rendered ridiculous by this kind of blatant bias.
Sebastia
dryfly asked: "Seb - do your 'shadow' results differ much from official? Just curious."
I substituted a new-construction housing price index for the OER (Owner's Equivalent Rent) in my Shadow CPI, and that's the only change I made. The "shadow" is more volatile and over time maybe .5% to 1% (annually) higher than CPI-U.
JMO but with homeownership up in the high 60% range, I think an inflation index that includes actual home prices (new or existing) or actual mortgage amounts instead of OER is going to be a more "accurate" measure of inflation than CPI-U, core CPI-U or the Median CPI. I'd just add 1/2% to 1% to the CPI-U and call it good, as a decent measure of inflation.
FWIW.
Sebastia
Sebastian, yes, Countrywide is clearly gaining market share - but I'm commenting on the housing market. In this case, delinquencies are rising and the "housing market continues to soften".
You appear to be making the argument that the last buggy whip company is gaining market share - and ignoring that the overall market is imploding (obviously an exaggeration here because the mortgage market isn't going away).
If you want to study Countrywide's numbers, I'd suggest looking at the amount of loans that were refi'd into fixed loans. Ask yourself if all those people refi'ng into higher rates - just to get out of their ARMs - are going to refi again next year.
Best Wishes.
"the last buggy whip company "
OK, so there really is something to be learned from "OPM" the movie? Of course, the words "rising share of a sinking market" can't possibly apply here, because houses never lose any value ever no matter what....right?
Can I buy "puts" at my local Wal-Mart? You think WM stocks them in the Home department or behind the returns counter with the cigarettes and lighters?
Can I buy "puts" at my local Wal-Mart? You think WM stocks them in the Home department or behind the returns counter with the cigarettes and lighters?
If it improved their margin & sped up their turns they would.
"Very well, I got that detail wrong."
Where I come from that would get your ass canned
CR said: "You appear to be making the argument that the last buggy whip company is gaining market share - and ignoring that the overall market is imploding (obviously an exaggeration here because the mortgage market isn't going away)..."
Actually, I'm making the argument that the demand for buggy-whips hasn't slowed down much for a market that's supposedly "imploding." Why hasn't the market shrunk, with all of those marginal homebuyers forced out of the market by tighter lending guidelines, higher interest rates, poor affordability, weakened consumer sentiment, etc., etc.?
Sebastia
Kevin said: "Where I come from that would get your ass canned"
Considering how insignificant the impact of the mistake was, yours must be a harsh workplace, one that encourages hiding errors instead of publicly admitting to them.
Sebastia