Countrywide announced today that July loan fundings rose 6% from year-ago levels, to $39.06 billion, though fundings dropped a whopping 14% from last month (June), and foreclosures and delinquencies surged.
It would appear that loan originations that accounted for the July loan fundings consisted of loan programs that have since been discontinued, such as 100% financing, option-arms, and other high risk products.
The 14% sequential drop in fundings from June to July of this year shows that reduction of financing options, which will probably be much more evident in the August figures.
Many loans that funded in June were probably originated in May or even April, before news on the secondary market prevented loan originators from producing risky loan programs.
Overall July mortgage loan volume of $39.06 billion was down sharply from June’s $45.26 billion in fundings.
On a scary note, foreclosures and delinquencies rose to their highest level since March 2002, with expected foreclosures as a percentage of unpaid principal soaring to 1.04% from 0.46 % a year earlier, and 0.96 percent in June.
Delinquencies also rose to from 4.11% to 5.10% sine last July, up from 4.98% in June.
Though with daily mortgage applications falling 15% to a nine-month low, the hope is that foreclosures and delinquencies will be reduced by more conservative offerings.
The Calabasas, CA-based mortgage lender hired an additional 1,159 workers nevertheless, totaling 61,586 employees, up from 54,655 at year end.
Shares of Countrywide dipped on the news, shedding 4.75% to sit at $25.34 a share in midday trading.