Posted on 08/15/2007 12:32:32 PM PDT by Hydroshock
NEW YORK (Reuters) -- Shares of Countrywide Financial Corp. dropped as much as 19 percent Wednesday on market rumors the mortgage company has been unable to raise money from the commercial paper market.
Countrywide officials were not immediately available for comment.
"People are buying Countrywide puts very aggressively on Wednesday off of rumors that the commercial paper market could be closed to them," said William Lefkowitz, options strategist at brokerage firm vFinance Investments.
Puts are options that allow an investor to sell a stock at a preset price by a certain date.
Another trader attributed the drop in the stock to the rumor.
Countrywide (down $4.40 to $20.06, Charts, Fortune 500) shares dipped 17 percent in late session trading on the New York Stock Exchange
(Excerpt) Read more at money.cnn.com ...
More hype to manipulate the market.
ping
A buying opportunity. Then U can do “flip this house” and make millions of $. Yeah, that’s the ticket!
Maybe that will keep the jerks from calling me every day asking if I want to refinance. I hope so.
Precisely. Someone's stoking the panic.
Countrywide rumors I don’t think are manipulative... they’ve made tons of questionable loans and the paper market is dead even for good loans.... if they find they can’t sell their paper and get stuck actually having to hold most of the notes they have written, they’ll cashflow crunch quickly.
The Country Wide honchos could care less. They’ve been pulling big bucks out of that pig for years. They got while the getting was good
If CountryWide can't get anyone to buy their securities (and who WOULD, conisdering their only goal is to close the deal...how strident are their "standards"), they don't have money to fund loans.
Even some loans with funding commitment...in escrow...are failing once the final step is taken to fund.
This is a VERY serious issue roiling the mortage business. The only people with money are the banks...and they're lending in accordance within strict "conformance" of the FannieMae and FreddieMac standards...the only way left to distribute risk.
There are very few places these days whose business model is to lend and hold on to the note. The wheels are coming off the machine.
Carolyn
Yes, which was my point.
"Countrywide, got it.
“. if they find they can’t sell their paper and get stuck actually having to hold most of the notes they have written, they’ll cashflow crunch quickly.”
They had enough cash to buy my mortgage last week.
IMHO, all this hype is much to do about a correction that was bound to happen. Rates go up and the people who had ARMS can’t pay. Banks knew it would happen. I think they are just trying to manipulate the market so their companies don’t have to take the hit.
It most likely has been sold already, they do not hang onto paper.
The whole mortgage industry is full of stinkers, both companies and clients. We customers made as much of a mess of all this as the companies have as we went for mortgages that we knew were not sound. I mean, they can’t force us to take these mortgages.
Drift,
No, this is more than just ARMs... this is overly loose lending practices... not just ARMS resetting, trust me that’s MSM drive by laziness, not reality.
As to having the money to initiate your loan last week, AMH or whoever it was was originating loans no problem until less than a week before they declared.
If Countrywide (or any large mortgage lender) can’t sell its paper to boost its cash on hand, they cashflow crunch quickly.
“As to having the money to initiate your loan last week, AMH or whoever it was was originating loans no problem until less than a week before they declared.”
Guess who Countrywide bought my loan from?
“If Countrywide (or any large mortgage lender) can’t sell its paper to boost its cash on hand, they cashflow crunch quickly.”
Does that mean I won’t have to pay my mortgage? /sarc
I’m just not a sky is falling kinda guy. These folks make money with the market goes up and they make money when it goes down. Its all a shell game.
Their bonds are now paying @13%
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