Today seems like the day to write articles about Countrywide Home Mortgage, but Countrywide seems to be adding to their own problems. Countrywide Financial Corp. dropped the most in two decades in New York trading on speculation that it needs cash to continue operating its mortgage business. There have been rumors about Countrywide and bankruptcy. As ironic as it seems there were actually two reports about Countrywide and bankruptcy.
One speculated that Countrywide might declare bankruptcy, while the other report caught Countrywide with their drawers down as they wanted more money from home owners who declared bankruptcy and were current on their mortgage payments. In one case Countrywide just made up letters presented as evidence. See more on that subject here.
Credit-default swaps tied to Countrywide’s debt soared to a record as investors demanded as much as 30 percent upfront and 5 percent a year to protect from a Countrywide default for five years, according to broker Phoenix Partners Group in New York. Yesterday, investors were demanding 20 percent upfront and 5 percent a year. Contracts trade on upfront payments when the market sees a high risk of default.
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This article, Countrywide Financial Singing Mortgage and Bankruptcy Blues, is just one of our articles from our Mortgage Crisis Daily
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