"Market conditions became increasingly challenging throughout the second quarter of 2007," said David Sambol, President and Chief Operating Officer. "The housing market continues to soften, and delinquencies and defaults continue to rise. Additionally, interest rates, price competition in the residential lending markets and secondary market volatility have all increased. However, Countrywide's residential funding volume in June was strong, driven primarily by seasonal purchase activity and higher application volumes in preceding months."In spite of the increase in delinquencies and foreclosures, Countrywide is continuing to hold steady to its growth strategy -- CEO Angela Mozilo has repeatedly said Countrywide's strategy is to grow while competitors retract or go out of business in the current housing down turn. Mortgage loan fundings for the month of June totaled $45 billion, an increase of 4 percent from June 2006, while commercial real estate funding exploded -- volume for the month of June was $814 million, up 75 percent from June 2006. Average daily mortgage loan application activity for June 2007 was $3.1 billion, Countrywide said, up 15 percent from June 2006. Countrywide's mortgage loan servicing portfolio continued to grow as well, reaching $1.4 trillion at June 30, 2007 -- an increase of $219 billion, or 18 percent, from June 30, 2006.
Countrywide Sees More Growth; Pending Foreclosures Reach Record High
Countrywide Financial released its June 2007 operational summary this morning, which showed that pending foreclosures at the nation's largest lender and servicer have reached what appears to be record levels. Pending foreclosures reached nearly 1 percent of the company's loan portfolio volume, and ratcheted up to 0.75 percent of the total number of loans serviced. A review of portfolio foreclosure history by yours truly found that pending foreclosures haven't been this high since at least 2000, the furthest back that Countrywide provides available statistical data on its Web site. Portfolio delinquencies have reached nearly 5 percent of the number of loans serviced, the highest in over a year, indicating that more foreclosures may be ahead as delinquent borrowers find they have few options in loss mitigation. (Keep in mind, HW readers, that we're talking total portfolio here. That's prime, Alt-A and subprime -- Countrywide doesn't report its subprime numbers in its monthly filings, but I'd hazard a guess that the delinquency rate in the subprime pool of loans Countrywide services is at or near 25 percent). For his part, company president David Sambol isn't pretending to be blind to market conditions: