Financials
2005
For year-ending Dec 31, 2005, amounts in thousands of dollars.
-
Total Assets: $235,085,370
-
Total Revenues: $13,016,708
-
Total Expenses: $5,868,942
-
Net Earnings: $2,528,090
-
Pre-tax Earnings by Segment:
-
Mortgage Banking: $2,434,525
-
Banking: $1,074,480
-
Capital Markets: $451,629
-
Insurance: $183,716
-
Global: $35,353
-
Other: $(31,937)
2006
For year-ending Dec 31, 2006, amounts in thousands of dollars.
-
Total Assets: $85,946,230
-
Total Revenues: $5,417,128
-
Total Expenses: $5,082,993
-
Net Earnings: $1,674,846
-
Pre-tax Earnings by Segment:
-
Mortgage Banking: $2,062,399
-
Banking: $1,080,384
-
Capital Markets: $253,500
-
Insurance: $120,133
-
Global: $28,642
-
Other: $(10,923)
In its 2006 annual report to the SEC, CFC disclosed that 19% of its subprime loans were delinquent.
2007
For year-ending Dec 31, 2007, amounts in thousands of dollars.
-
Total Assets: $211,730,061
-
Total Revenues: $6,061,437
-
Total Expenses: $6,764,975
-
Net Earnings: $(703,538)
-
Pre-tax Earnings by Segment:
-
Mortgage Banking: $(1,517,083)
-
Banking: $(268,752)
-
Capital Markets: $14,957
-
Insurance: $600,542
History
Countrywide was founded in 1969 by David S. Loeb and Angelo Mozilo. Loeb died in 2003. The initial public offering was less than successful, with company stock trading over the counter at less than $1 per share. In 1985 Countrywide stock was re-listed on the New York Stock Exchange under the ticker symbol CFC.
CFC has been described as the "23,000% stock" by
Fortune
magazine. Between 1982 and 2003, Countrywide delivered investors a 23,000% return, exceeding the returns of Washington Mutual, Wal-Mart, and Warren Buffett's Berkshire Hathaway.
Businesses
Mortgage banking
The Mortgage Banking segment produces mortgage loans through a variety of channels on a national scale. Nearly all of the mortgage loans the company produces in this segment are sold into the secondary market, primarily in the form of mortgage-backed securities. In 2006, 45% of those mortgages were conventional non-conforming loans, loans too large to sell to Fannie Mae. The company generally performs the ongoing servicing functions related to the mortgage loans that it produces. It also provides various loan closing services, such as title, escrow and appraisal.
The Mortgage Banking segment consists of three distinct sectors: Loan Production, Loan Servicing and Loan Closing Services.
Loan production
The role of Loan Production is to originate and fund new loans, and to acquire already-funded loans through purchases from other lenders. Loan Production produces mortgage loans through four divisions of Countrywide Home Loans: Consumer Markets, Full Spectrum Lending, Wholesale Lending and Correspondent Lending.
Consumer Markets and Full Spectrum Lending offer loans directly to consumers. Loans produced by these two retail division are originated, funded, and sold by Countrywide. Consumer Markets offers a wide variety of products, whereas Full Spectrum Lending focuses primarily on products appropriate for customers with less than prime-quality credit.
Wholesale Lending offers loans to consumers whose loans are originated by another mortgage broker. These loans are funded and sold by Countrywide, but originated by other lenders.
Correspondent Lending purchases mortgage loans from other lenders, which include mortgage bankers, commercial banks, savings and loan associations, home builders and credit unions. These loans may be sold by Countrywide to end-investors on the secondary market, but are originated and funded by other lenders.
Loan servicing
Loan Servicing services loans, i.e. collects payments from the borrower, handles escrow accounts, tax and/or insurance payments (if applicable), then remits "advances" to the investor's trustee as specified in the Pooling and Servicing Agreement (PSA).
Loan Servicing typically retains a fraction of the payment made (typically 25 - 45 basis points of the unpaid principal balance) as a "servicing fee".
Loan Servicing also generates income in the form of interest on monies received and held prior to paying scheduled advances to the trustee, fees charged for late payments, force-placed insurance, document requests, legal fees, payoff statements, etc.
Loan closing services
LandSafe and its subsidiaries offer loan closing services, including real estate appraisal services, automated credit reporting products, flood determination services and residential title services for the six major counties of Southern California.
Banking
The Banking segment consists of Countrywide Bank, FSB and Countrywide Warehouse Lending. Formerly, the bank was known as Countrywide Bank, N.A., a nationally chartered bank that was regulated jointly by the Office of the Comptroller of the Currency and the Federal Reserve, but it converted its charter to a federally chartered thrift that is regulated by the Office of Thrift Supervision. Countrywide Bank is the 3rd largest Savings and Loan institution and is the fastest growing bank in United States history. Assets from deposits are currently approaching $125 billion.
Countrywide Bank primarily originates and purchases mortgage loans and home equity lines of credit for investment purposes. The majority of these loans are sourced through its mortgage banking subsidiary, Countrywide Home Loans. The Bank obtains retail deposits, primarily certificates of deposit, through the Internet, call centers and more than 200 financial centers, many of which are located in Countrywide Home Loans' retail branch offices as of April 1, 2007.
Countrywide Warehouse Lending provides warehouse lines of credit to mortgage bankers, who use these funds to originate loans. These mortgage bankers are primarily customers of Countrywide Home Loans' Correspondent Lending division and the Capital Markets divisions; the mortgage bankers use warehouse lines of credit from Countrywide Warehouse Lending to help originate loans, then sell those loans to Countrywide through Correspondent Lending or Capital Markets.
Capital markets
The Capital Markets segment primarily operates as a registered securities broker dealer, a residential mortgage loan manager and a commercial mortgage loan originator. CFC also operates broker dealers in Japan and the United Kingdom, an introducing broker dealer of futures contracts, an asset manager and a broker of mortgage servicing rights. With the exception of its commercial mortgage activities, the company transacts only with institutional customers, such as banks, other depository institutions, insurance companies, asset managers, mutual funds, pension plans, other broker dealers and governmental agencies. Customers of its commercial real estate finance business are the owners or sponsors of commercial properties, who can be individuals or institutions.
Countrywide Asset Management Corporation manages the acquisition and disposition of loans from third parties, as well as loans originated by Countrywide Home Loans, on behalf of Countrywide Home Loans. These are typically delinquent or otherwise illiquid residential mortgage loans, which have primarily been originated under Federal Housing Administration (FHA) and Veterans Administration (VA) programs. The Company attempts to rehabilitate the loans, using the servicing operations of Countrywide Home Loans, with the intent to securitize those loans that become eligible for securitization. The remaining loans are serviced through foreclosure and liquidation, which includes the collection of government insurance and guarantee proceeds relating to defaulted FHA and VA program loans.
Securities trading activities include the trading of debt securities in the secondary market after the original issuance of the security. Underwriting activities encompass the assumption of the risk of buying a new issue of securities from the issuer and reselling the securities to investors, either directly or through dealers. Capital Markets primarily underwrites mortgage-related debt securities.
Insurance
The Insurance segment activities include offering property, casualty, life and credit insurance as an underwriter and as an insurance agency, and providing reinsurance coverage to primary mortgage insurers, through two business units: Balboa Life and Casualty Operations, and Balboa Reinsurance Company.
Balboa Life and Casualty Group underwrite property, casualty, life and credit insurance in all 50 states through the Balboa Life and Casualty Group. Its products include Lender-Placed Property and Auto, which includes lender-placed auto insurance and lender-placed, real-property hazard insurance; Voluntary Homeowners and Auto, which underwrites retail homeowners insurance and home warranty plans for consumers, and Life and Credit, which underwrites term life, credit life and credit disability insurance products.
Balboa Reinsurance Company provides a mezzanine layer of reinsurance coverage for losses between minimum and maximum specified amounts to the insurance companies that provide private mortgage insurance (
skategirl
asked:
"We are looking to refinance our mortgage. We had a bad experience with a mortgage broker the first time around. Aside from the BBB, are there any websites where I can find others' opinions/experiences with mortgage companies?Having received some offers already, there are a few which look too good to be true. The majority of the offers so far are at the same, somewhat higher rate (which seems to be the normal rate for our area). I just want to do some background research on the few companies that are offering the lower rates before we accept one of them.Thanks!"
Question posted courtesy of:
Jimmie replied:
"http://www.mtgfoundation.com/2007/02/mortgage-broker-trade-group-borrowers-need-better-information.html"
Tadow replied:
"What you ned to know about mortgages:You need to understand the mortgage process. If you understand it, then no one can rip you off...All you need to know about a mortgage right now so print this out.1. Prepayment penalty if any2. Terms of the loan (If adjustable, how long?)3. Rate(s) of interest at funding4. Rate Cap (Highest mortgage rate possible)5. What program you're gettingMessage me if you want my contact info and I'll help you out..."
Mark M replied:
"Here is what I tell people to do:Apply by giving all your information, including your social security number, to 3 companies. Your local bank or credit union, a mortgage company like Countrywide or Ditech, and a mortgage broker.Ask them to fully approve your loan based on your full verbal application. This can be done in today's mortgage industry. It takes about an hour of work.Ask each of them to lock your rate.Ask for a copy of your approval, a copy of your lock and how much variance they are willing to guarantee in writing from the Good Faith Estimate to the Estimated Closing Sheet at loan doc signing.Then make a decision to work with one of the three. That is when you can then send in your faxed documentation of income and assets, signatures, and pay for your appraisal.Any company not willing to do the things above does not deserve your business.Doing it this way means you can somewhat trust that the deal you have been quoted will be what you see when you sign loan documents."
Yoli replied:
"Visit your local department of real estate website, look up the company and the loan officer. If your loan officer is not licensed don't do business with them. Any complaints or suspension of license will be listed with DRE. Bottom line if you are working with a company that doesn't charge application fees upfront you are pretty much covered, if they don't deliver the loan in the terms you agree on you don't sign, they don't get paid, simple as that.Hope this helps!!"
Sarah C
asked:
"Do mortgage companies make money by offering a higher interest rate. For example- one mortgage lender is offering 6.5, and mine is offering 6.75. If they are both equal for service, closing costs, etc., how could one offer a lower rate? Do they stand to make money off of the extra .25%? I tried to negotiate the rate with my current lender, down to 6.5%, but they told me they could not. Are they lying, because they feel they already "have me"?But isn't their rate, based somehow on the fed rate?"
Question posted courtesy of:
draco3838 replied:
"two words: interest rate."
mazziatplay replied:
"Lenders price individually using a procedure called hedging. Some lenders have a higher cost of doing business and so will hedge accordingly. One thing to check though is to find out if the lender quoting you 6.5% has the same APR as the one quoting you 6.75%. If the APR is higher on the lower rate, there are extra costs in there someplace.For a 30 year fixed rate today my rate sheet says that 6.75% is at par (no buying the rate down) with a 1% loan fee on a 30 day lock. 6.5% costs an additional 1% in discount to buy down to that rate."
dzwreck replied:
"Mortgage companies make their money a variety of different ways. The 2 mains ways are through front and back end fees. Front end fees are items that they are charging up front such as an origination fee, processing fee, etc... Back end fees are fees that the mortgage company is making from charging a higher interest rate. Just because one lender is charging a higher rate than the other does not necessarily mean that they are making more money. Sometimes some lenders simply have better rates and pricing than other lenders. Consider 2 stores that sell the same item. One for a dollar and the other for 1.25. This does not mean that the store that sells the item for 1.25 is making more money because the store that sells it for a dollar may be able to buy the product at a better overall price because of pre-arranged agreements with the seller or because they buy more bulk. The same can be thought of with mortgage lenders (somewhat). Now if the differing rates where way off then one of the lenders is most likely making some money off of the backend and charging you a higher rate than they need to. Hopefully that all makes sense. Good luck."
marxistharpist replied:
"As a mortgage broker, you can make money two ways. The first way is through closing costs, the other is by yield spread. By offering a higher interest rate to the borrower, the bank actually pays you. That's why you have zero closing cost loans, because they just bump up the interest rate and get paid that way. 6.5% is par pretty much everywhere right now, it might be that, because of some overlay that the best rate available to you is 6.75 and the company offering 6.5 has missed it. The best thing you can do with mortgages is shop around, find something that you are comfortable with and make sure you are getting what you want."
newmexicorealestateforms replied:
"Those rates sound pretty good. But never the less if you are worried about getting the best rates here are some links that you might want to look atFTC: High Rate – High Fee Loans (know your rights): FDIC Consumers links for real estate and other information HUD Sample of Good Faith Estimate: Good luck to you"
Mortgageman replied:
"6.75% is making more money off of you than the 6.5%, if the lender fees are the same. We all get our rates from the same place. I'm sure they don't feel they already have you. I'm a 6.75% guy because I value my services. In most cases, you get what you pay for."
Fico C replied:
"There is a big piece missing in these answers. Yes, a mortgage broker can paid by either a Y.S. which some people call "back end" and or origination cost "up front"Depending on what type of mortgage your are getting should you take in the back end.If you are getting a short amort. loan, then you may want to to back end and not pay origination. If you are going to one 30 to another 30 you will want to pay origination.Unfortunately, all brokers don't look at the long term cost of pts. How long it will take to pay the origination off etc... Some brokers only look at the immediate situation instead of long term and are uneducated about the "mortgage business"Get yourself an experience broker and allow them to give you choices. If you don't have choices then you don't have a good broker.Now to play the have to play the devils advocate.Oh, by the way. Just because one broker offers you 6.5 and another broker offers you 6.75 doesn't mean someone is trying to get over on you. It simply can mean one broker doesn't have access to a lender that the other one does... Meaning if I have B of A as a lender and another broker has Country Wide and Country Wide has better rates. Broker A can only offer you what they have."
james w
asked:
"Just want to know what information mortgage companies can and can not verify. Do they just use the information you send to them."
Question posted courtesy of:
doanel replied:
"Darn right they will verify all information. You're about to make the biggest purchase of your life. They want to make sure you can pay for it."
mandy_johnson19 replied:
"They can. But, if you furnish a recent bank statement, you should not have a problem."
golferwhoworks replied:
"no you would have to supply them with them. They can execute the 4506 t with the IRS and see how much you filed on the last years tax return. It is a document that you sign when executing the deed of trust and mortgage I am a mortgage banker in TN & KY"
Daisy replied:
"Yes they can and will verify income, if you gave permission. In the application for a mortgage you give permission for them to gather any information they need. Actual statements they may ask you to provide to them. Would you loan money to someone without knowing if they could pay it back?"
Jen M replied:
"Oh my heck...yes they will not pull the bank statements, they will have you furnish your bank statements, Retirement information statements, Statements on any debt you might have, paycheck stubs. They will pull your credit history and fico score.AND, they may have you furnish this information several times and often won't give you much time to get it. They do use the information you give them, but you will most likely have to go to the bank and get a very official copy of the information or have the bank send them a copy.Here is what I did when I was doing my mortgage. I went in and talked with the Mortgage lender. I had her make me a list of what information she would need and I gathered it all together and took it to her. That said, it took me a while to find my house and so because so much time had passed I had to furnish all the information to them again.Good luck."
serendipitous_333
asked:
"Remember when Bush spoke of his "ownership society"? Did Bush give any incentives for those brokers and mortgage companies to create those exotic loan products, so many of which are now in default? Do you think that increased regulation could have mitigated this disaster?"
Question posted courtesy of:
fattyandpeewee4evafinesseanthony replied:
"because hes bush ...................just like he convinces all them people to vote for him..........................................................................................................................................because dont nobody realy care for american or the usa"
mr_mumbles_nyc replied:
"The loan products weren't so exotic... ARMs, interest-only, 110% financing... these aren't new.The big problems were:1) Making loans to unqualified borrowers (subprime)2) Securitization of CMBS/RMBS/CDO with investment grade ratings that did not reflect their true riskI don't like Bush or his economic policies, but I'd pin this one on the financial services industry and real estate players (including flippers)."
PAYAK replied:
"First off, the mortgage standards were relaxed during the Clinton presidency. Second, the CONGRESS (especially democrats) mandated the banks and mortgage companies loan to low income families to promote home ownership. That make the congress a big bunch of hypocrites for trying to pin this on the president. Third, the banks and mortgage industry made alot of money during the past few years. Make them suck up all of the losses and not expect the taxpayers to bail them out. Unlike alot of the sub-prime folks who took out the loans, the banks KNEW what they were doing."
Leo F replied:
"Bush did not have anything to do with it. The lenders came up with it all on their own. Also mortgage brokers dont have any money to lend, they just broker loans to the lenders and they sure dont create loans."
acermill replied:
"Bush didn't actually do anything to encourage this loan mess, other than look the other way, when it was pretty obvious as to what was happening.Of course increased regulation would have helped avert the seriousness of the situation, but then Bush would not have been able to make his claims that 'home ownership are at an all time high."Now that the noose has tightened to the uncomfortable point, it appears that Bernanke will work to help institute tighter credit regulations for such loans.This president claims to have a MBA from a prestigious university. I fear that, in his case, it stands for More Bungled Acts."
MLaw replied:
"You can't hang this on Bush. All the elements were created before he came into office. The R/E bubble collapse is not a "disaster." It is a perfectly normal end to the latest financial bubble. Everyone who got hurt voluntarily took the risk."
TX-REInvestor replied:
"He didnt... neither did any other US president.This was brought on by mortgage folks giving home loans to people who should NOT have had a home loan to begin with.The createive loans were designed for investors but were given to homeownsers for the most part. Bad move.Increased regulation could have prevented it but do we really need any more "big brothers" out there now?I dont think so."
bigkahuna47394
asked:
"Companies keep selling my mortgage over and over again. Its a fixed rate mortgage and i have had it since 2004. We started with HSBC and as of now the mortgage has been sold 4 times to 4 different companies. Should i be alarmed? I plan on moving in the next year, is there anything i should do to protect my self? Thanks"
Question posted courtesy of:
kemperk replied:
"do not in any way be concerned.if in doubt about the legal debt due to anylender who finally sends you a coupon book or whatever for payment, you are in your rights to make them prove they own the debt.Mine was sold 3 times in 2 weeks.means nothing!does not affect credit in any way[or it might, it might gave you a prematuregood evaluation with the first lender.]"
erchnic replied:
"As long as you pay your bills on time, you have nothing to worry about. That's how banks do business. How do you know they sold the loan? Are you actually dealing with four different companies? Have your credit check run by any of the three major credit companies, just to be sure."
godged replied:
"This happens all the time and it doesn't effect your credit score in any way. No need for concern here. Mortgages are sold in bulk on the secondary market. Investment companies review "packages" of mortgages and purchase them from lenders. This frees up money for lenders to make new loans.Hope this all makes sense, but there is no need for you to be concerned, that is the bottom line."
Jeromy W replied:
"This isn't suprising, I know HSBC does sell some of there business, it depends on the product and/or origination channel. This really will not effect your credit in any way unless you miss a payment. There are laws to protect you. The old servicer has 15 business days to inform you that your loan is being sold. The new servicer has 15 days after purchase to inform you that they are servicing your loan. You have 60 days in which you can make a payment to the old servicing company without penalty. You can look these up if you want. I would have a full credit workup just to make sure a company hasn't reported you late when they should not have. As long as you make your payments on time, your ok"
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The regulator for the two largest U.S. mortgage finance companies on Tuesday unveiled a plan that could cut payments for hundreds of thousands of struggling homeowners to help reverse a wave of defaults...Homeowners facing foreclosure who are spending more than 38 percent of their income on mortgage payments could have payments reduced.
In the past we have depended on my income primarily. Now I am disabled and housebound by Parkinson's disease, and can't drive. My income is $1,980 from Social Security. My husband is self-employed. He has an education company. He specializes in academic rescues and academic interventions. His business no longer produces an income,
Tips to help you work with your mortgage company during your foreclosure procedure.
I live in Cuba, Missouri since the economy went down hill,had to close my business,thus make much less money. Payment went from 1250.00 to 1850.00 due to company escrowing taxes. I still haven't been able to figure out how the sum of the amounts add up. Chase is our mortgage company, we can barely afford the original payment but not what it has bec
