Countrywide Financial Corp. (CFC.N: Quote, Profile, Research) Chief Executive Angelo Mozilo said on Tuesday the U.S. mortgage sector is entering a "liquidity crisis," but that investors and speculators are overreacting by punishing healthier lenders as well as marginal ones.
"This is now becoming a liquidity crisis," and "it's going to get uglier," Mozilo said on CNBC television.
Mozilo said the winnowing out will be "great" for Countrywide, the largest U.S. mortgage lender, which might pick up market share.
He said investors and speculators, who have punished shares of many companies with mortgage exposure, have engaged in an "overreaction, a baby out with the bathwater." Still, he said the housing slowdown means "the economy will be impacted negatively, and the (Federal Reserve) will move interest rates down."
Today we've had the second largest subprime lender delisted, another entering a period of problems and the largest subprime lender say mortgages are in a liquidity crisis.
I think all of this qualifies as a bad news day.
2 comments:
What kicked off this subprime meltdown, or at least the first hole in the damn thta I noticed was when NFI announced the likelihood of having no earnings for the next 5 years back on 2/21.
http://tinyurl.com/37bmnm
It came as a complete and total shock to the "die-hards" on the message board. NFI had one of the more die-hard followings, and even had it's own shareholder run INFO website. Very very scary:
http://nfi-info.net/myths.htm
The NEW/LEND meltdown was actually quite predictable and was a good put option play, very proftable, in March. Now the question is, who's next?
What is your prediction in the next 2 years for the sub-prime home mortgages market?
Jord - UK Home Mortgage Guy
UK Home Mortgages
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