Countrywide Reeling From Mortgage Woes

No. 1 mortgage company warns investors of 'unprecedented disruptions'
By Jason Farago,  Newser Staff
Posted Aug 10, 2007 5:42 AM CDT
The Countrywide Banking and Home Loans office in Glendale, Calif., is seen in this April 26, 2007 file photo . Countrywide Financial Corp. said Monday, Aug. 6, 2007 it has access to $46.2 billion in...   (Associated Press)
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(Newser) – The nation's largest mortgage lender has warned that troubles in the subprime credit market have led to "unprecedented disruptions" that will hurt their bottom line. The Los Angeles Times reports that Countrywide is steeling its investors for bad news: in a suddenly illiquid market the already-troubled company has been forced to hold $1 billion more "non-prime" mortgages than intended.

Countrywide reports in its SEC filing that the subprime meltdown has forced it to hold on to extra loans that it would normally sell off. Countrywide hopes that it will be able to ride out a mortgage market downturn but has admitted that "the potential impact on the company is unknown." Since the subprime crisis began six months ago about 70 mortgage lenders have stopped business.