Does Bank of American big man Ken Lewis know what he's getting into with Countrywide? The recent news tying former Fannie Mae chief executives to sweetheart loans from Countrywide may result in the home lender getting cut off from the GSE gravy train. At the very least, Countrywide's share of Fannie Mae's dollars for mortgages exchange program is sure to decline.
But it's not just Countrywide's revenues that are in trouble. It's piling up declining real estate assets as borrowers default. "As the deal moves ever closer, the number of homes that Countrywide owns in Florida has now climbed above 1,600 and the prices, despite being slashed repeatedly, continue to fall," Michelle Leder writes at Footnoted.org.
More examples of Countrywide's multiplier effect... [Footnoted]
Posted by guest , Jun 17, 2008 11:52AM
"may result in the home lender getting cut off from the GSE gravy train" what on earth is your basis for saying that? yellow journalism?
Posted by John Carney , Jun 17, 2008 11:59AM
The scandal is growing. There's no way Countrywide is going to keep getting its outsized share of Fannie Mae's bucks once this thing shakes out.
Posted by lemmerdeur , Jun 17, 2008 12:06PM
11:52AM: Said GSE gravy train would be a federal program. All federal programs come with heavy legal mumbo-jumbo that bars individuals and corporations that have been convicted of certain types of criminal activity. Bribing federal employees is ALWAYS one of the crimes that excludes you from such federal payola.
Of course, if a CFC collapse is considered a systemic risk (and I think it is considered as such), everyone involved would do whatever it takes to get around such obstacles. The best way to maintain CFC/BoA eligibility would be to sacrifice some high profile CFC folks. I'd say jail time for Mozillo is looking more likely by the day, as well as a few high-profile congressional resignations.
Posted by guest , Jun 17, 2008 12:13PM
i think mr. lewis is just taking some good sound sailing advice, with all the due diligence in the the world, you're not going to find all the problems with a new boat till you're out on the ocean...
http://youtube.com/watch?v=pmcsr0wt4wk
Posted by guest , Jun 17, 2008 1:00PM
am i missing something? what outsized share? besides that it is still the largest mortgage originator in the country. it's not like others are trying but just can't get any guarantee from the GSEs
Posted by guest , Jun 17, 2008 1:01PM
carney after your repackaged kedrosky post you had better be massively short bofa/countrywide if you hope to have any credibility at all