Author Topic: Countrywide going bankrupt?  (Read 364 times)

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Offline Matthew

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Countrywide going bankrupt?
« on: January 08, 2008, 02:16:30 PM »
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  • I don't believe 'em. This is the company whose CEO was selling stock at a breakneck pace even as he had his board buy up company stock -- to keep the price up!

    The man -- Angelo Mozillo -- belongs up there with Ken Lay and other fraudsters throughout history.

    Countrywide denies bankruptcy plans
    Nation's largest mortgage lender says talk has 'no substance.' New York Times reports lender 'recreated' letters in bankruptcy procedure.

    January 8 2008: 2:49 PM EST

    NEW YORK ( -- Shares of Countrywide Financial Corp., the nation's largest mortgage lender, partially recovered from a midday plunge Tuesday after the company denied rumors that it was planning to file for bankruptcy protection.

    "There is no substance to the rumor that Countrywide is planning to file for bankruptcy," said Countrywide (CFC, Fortune 500) spokesman Rick Simon in an e-mail received by, "We are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the Company."

    Countrywide stock dipped as low as $5.76 before the New York Stock Exchange temporarily halted trading in advance of the company's statement. The decline sent stocks overall lower.

    When trading resumed, the shares rebounded somewhat and were down $1.36, or 17.8 percent, to $6.28 in afternoon trading.

    The stock fell early in the day following a report in The New York Times that said court records show the lender fabricated documents related to a bankruptcy case of a borrower in Pennsylvania.

    "It is not Countrywide's policy to create or 'fabricate' any documents as evidence that they were sent if they had not been," Countrywide said in a statement sent to the Times prior to the story's publication that was e-mailed to
    Nearly 90,000 mortgage jobs eliminated

    Other Countrywide actions in borrowers' bankruptcy cases have come under scrutiny in the past.

    The U.S. Trustee launched an inquiry last fall to investigate whether the lender's claims against two South Florida borrowers seeking bankruptcy protection violated bankruptcy laws.

    Investors have been particularly anxious about Countrywide in recent days. Its stock is well below its 52-week high of $45.26.

    Countrywide, like many in the mortgage industry, has suffered as more customers have defaulted on home loans, particularly on those made to borrowers with questionable repayment histories.

    The Calabasas, Calif.-based company reported a $1.2 billion loss in the third quarter of last year, but management forecast a profitable fourth quarter and 2008.

    Wall Street analysts are skeptical the company will be able to deliver on its projection, amid ongoing home-price declines, an expected new wave of mortgage defaults this year, and lingering problems with credit markets.
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