Countrywide Reports December 2007 Operational Results

January 9, 2008 No Comments »

Countrywide released its operational results for December, showing a slight improvement in loan fundings from November, but a 45 percent decline from year-earlier levels.

“Our fourth quarter ended with a number of positive operational trends,” said David Sambol, President and Chief Operating Officer, in a statement. “Total loan fundings were $24 billion for the month of December, up slightly from November 2007 and ahead of our forecasts.”

“This pushed our fourth quarter fundings to $69 billion, also exceeding our expectations. Although average daily mortgage loan applications and the pipeline of mortgage loans-in-process decreased from November, this reflected a seasonal decline typically seen this time of year.”

Average daily mortgage loan application activity for December was $1.5 billion, down from $1.9 billion in November.

The mortgage loan pipeline fell sharply in December, dipping to $35 billion as of December 31, 2007, compared to $43 billion for November 2007.

The struggling mortgage lender’s loan portfolio grew in December, reaching $1.48 trillion as of December 31, 2007, up $5.4 billion from the end of November and $178 billion from December 31, 2006.

“Our mortgage loan servicing portfolio is approaching $1.5 trillion, representing approximately 9 million loans,” Sambol continued.

Prepayment speeds continued to decline throughout the quarter, which has enhanced the economic value of our mortgage servicing rights asset.”

However, foreclosures and delinquencies both rose significantly from year-ago levels.

Foreclosures more than doubled to 1.44 percent of unpaid principal in December from 0.7 percent a year earlier, while late payments surged to 7.2 percent from 4.6 percent.

Countrywide made only $6 million in subprime loans in December, down from $3.7 billion a year earlier, as it continued to avoid the high-risk market.

Deposits continued to rise at Countrywide thanks to favorable mortgage rates, though a run on the bank is sure to follow yesterday’s speculation.

“Banking Operations’ assets were $113 billion at December 31, 2007, with total deposits reaching $61 billion at the end of December. Retail deposits alone increased $2.3 billion during the month and $7.7 billion for the quarter to $33 billion.”

Despite what seemed like a panicked early release of the data, Countrywide continued to move lower Wednesday.

In late morning trade, shares of Countrywide were off 44 cents, or 8.04%, to $5.03, slipping as low as $4.43 earlier in the session.

Update: Moody’s downgraded the ratings of 30 tranches of mortgage debt issued by Countrywide, and said it may cut ratings on another 16 tranches from 15 deals issued by the ailing lender in 2007.

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