As we warned you here in August … and as I explained on CNBC a few days later … America’s kingpin of mortgages is on a collision course with bankruptcy.
Its name: Countrywide Financial.
If it goes under, the impact on U.S. financial markets will be immediate; the damage to the U.S. economy, long-lasting. … Countrywide is the GM and Ford of the mortgage industry, originating $340 billion in loans in the first nine months of the year — more than the mortgage subsidiaries of Bank of America and Citigroup combined. …
Already, Countrywide has laid off about 12,000 employees, a number that could soon rise to 20,000 as mortgage originations plummet.
Already, Bank of America, which infused $2 billion of bailout funds into the company in late August, has seen nearly half its investment go down the drain. In just 93 days!
And already, investors who bought Countrywide’s shares at its recent peak in February have lost four fifths of their capital. All in just 294 days! …
The company admits it has a whopping $27 billion of delinquent subprime mortgages, more than the total mortgages (delinquent or not) held by some of the nation’s largest banks.
I recommend reading the article posted on Money and Markets.