Countrywide gets new financing

first_imgWall Street, which had been punishing the company by beating down the stock price, responded favorably to Thursday’s development. Countrywide’s stock closed at $18.93, up $2.31 or 13.9 percent. In a release Countrywide said that during August: Mortgage loan fundings totaled $34 billion. Average daily mortgage loan application activity was $2.3 billion, a decline of 12 percent from August 2006. CALABASAS – Countrywide Financial Corp., besieged by the credit crisis, said Thursday it arranged $12 billion in new financing while revealing that August’s mortgage fundings fell by 17 percent. The Calabasas-based company indicated that this round of money came from new and existing credit arrangements. In the past month, the nation’s biggest mortgage lender has been infused with $25.5 billion, which included selling a $2 billion stake to Bank of America, to stay afloat. “Adjusting to the turbulent conditions in the mortgage and credit markets, the company has taken decisive steps since early August,” David Sambol, the company’s president and chief operating officer said in a statement. The mortgage loan pipeline was $52 billion at month’s end versus $64 billion for the same period last year. The mortgage loan servicing portfolio continued to grow, reaching $1.5 trillion at the end of the month. It’s an increase of $226 billion, or 18 percent, from a year ago. Commercial real estate funding totaled $757 million, up from $273 million in August 2006. Banking operation assets were $94 billion, up from $87 billion a year ago. “Residential mortgage loan activity for the month of August reflected current mortgage market conditions,” Sambol said. The company continues to deal with the housing slowdown and credit tightening. Last week Countrywide said it would trim between 10,000 and 12,000 jobs, or 20 percent of its work force, to cut costs. At that time Sambol and company Chairman and Chief Executive Officer Angelo R. Mozilo distributed a lengthy letter to employees that discussed the current environment and the fact that theirs is a cyclical business. “Each cycle brings with it a unique set of challenges, and this time is no different. In fact, this current cycle is certainly the most severe in the contemporary history of our industry,” it said. “There is no question that our industry, our company and many of our borrowers continue to face significant challenges.” Also on Thursday the company was hit with another lawsuit over losses incurred in the employees’ 401(k) retirement plan because of the falling stock price. On Tuesday attorney Steve Berman filed a similar suit in U.S. District Court in Santa Ana. That suit also seeks class-action status and claims Countrywide failed to warn its employees about the depth of its financial troubles, resulting in heavy stock losses in employees’ 401(k) retirement accounts. greg.wilcox@dailynews.com160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img

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