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Countrywide is in the news for possible security fraud and ceo compensation.

 

The stock market took a beating this week and the executives at Countrywide did not fair much better.

The continued decline of the real estate market in the U.S. is shedding light on some of the top Ceo's of financial institutions. This week Angelo Mozilo of Countrywide was questioned before Congress as to why he sold over $600 million in company stock in 2007, just prior to the largest collapse of the mortgage industry in the past 20 years. Also questioned were the former Ceo's of Citigroup and Merril Lynch. The mortgage industry is facing an estimated $800 billion in losses over the next five years, primarily attributed to underwriting practices with sub prime loans. In addition to the scrutiny that the top Ceo's are facing, Countrywide's problems may be getting more serious. A report out of the Wall Street Journal indicated that the FBI may begin investigating the firm for security fraud relating to how the firm disclosed the values of their mortgage securities. The companies stock dropped from the $30+ range to under $5 earlier this year, prior to the firm agreeing to a buy out offer from Bank of America. The mortgage industry has yet to recover from the spiral downward. Despite improvements in the yield of treasury bonds, mortgage bonds and more importantly mortgage rates have seen a larger spread over the past week. Investors are clearly discounting mortgage securities with growing fears that the U.S. housing market may take years to recover.

3-8-2008 ? LoanNetwork.com

 

 

 

 

countrywide in the news @ loannetwork.com

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