Countrywide Slumps On RefiSet-Asides
CALABASAS, Calif. - (07/27/05) -- The ongoing refinancing boomcontinued to wreak havoc on Countrywide Financial Corp., whichreported a 28% drop in second-quarter earnings, to $566 million, or92 cents a share, compared to the same quarter last year, due to amassive swing in the value of its servicing portfolio. The nation'sbiggest mortgage lender reported a $1.4 billion loss for funds setaside for the recovery of mortgage servicing rights, compared to a$1.2 billion gain in the second quarter last year--as recordnumbers of its borrowers continue to refinance their mortgages.However, all but $261 million of the $2.6 billion difference, wasmade up by a $2.3 billion swing in the value of the company'shedging portfolio. The ongoing mortgage boom helped pushCountrywide's loan production up 21% over last year, to $121billion for the quarter, and its servicing portfolio by 33% to anew high of $964 billion at mid-year. For the first six months ofthe year, Countrywide reported a 6% drop in net income to $1.26billion, or $2.05 a share, compared to the first half lastyear.