Countrywide Caught in Mortgage Downturn

CALABASAS, Calif. – Countrywide Financial, the world’s largest mortgage bank, reported a 3% decline in net income for its fourth quarter, due to a decline in loan activity and credit quality. The company reported a 6% fall in revenues, to $2.76 billion, and a 2.7% fall in net income to $621.6 million, or $1.01 a share, compared to the fourth quarter the prior year. For the full year, Countrywide reported a 14% rise in revenues to $11.4 billion, and a 6% increase in net income to $2.7 billion, or $4.30 a share. However, fiscal year results include a 15% decline in mortgage banking revenues, to $2.1 billion, compared to the year before. Major gains were in banking (28%), capital markets (23%) and insurance (73%). Chairman and Chief Executive Angelo Mozilo said in a statement that the lender faced flat and inverted yield curve conditions, home price depreciation, slowing home sales, declining production volumes, and pressure on credit quality during the year.