Foreclosures Double at Countrywide; Delinquencies Up 66 Percent in February

Countrywide Financial Corp. reported Thursday that credit quality in its substantial servicing portfolio continued to deteriorate last month, with the volume of foreclosures more than doubling at the nation’s largest independent mortgage lender.

Foreclosures reached 1.64 percent of unpaid principal balance, up from .80 percent one year earlier. Delinquencies reached 7.44 percent of UPB during February, Countrywide said, up from 4.48 percent one year ago — but down slightly from the 7.47 percent reported during January.

Funding activity, servicing portfolio record growth
Despite being bitten by rising foreclosures, mortgage loan fundings for the month of February 2008 were $26 billion, up 17 percent from January 2008. Applications fell, however, with reported average daily mortgage loan application activity at just $1.9 billion during February, compared to $2.6 billion for January; a drop in applications often signals lower funding levels in future months.

Wholesale fundings remain off dramatically compared to year-ago levels. The company has funded just 27,417 units via the wholesale channel thus far in 2008, compared to 66,983 units one year earlier. A drop in correspondent funding, however, was even more pronounced: just 91,487 units have been funded year-to-date via the channel, compared to 153,608 one year earlier. Correspondent lending, once Countrywide’s largest channel by unit volume, is now lagging behind retail lending.

Despite changes in origination volume and practices, Countrywide’s servicing portfolio continued to post strong growth, rising 1.6 billion between January and February, the company said. The portfolio now stands at an eye-popping $1.48 trillion - among the nation’s largest, along with Wells Fargo & Co.

Countrywide’s monthly reports are also likely to be no more; the company said that it will no longer release monthly operational data, moving to a quarterly reporting schedule for future reports.

For more information, visit http://www.countrywide.com.

Disclosure: The author owned shares of CFC when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.