Countrywide In Trouble With Mass. Pension Fund
Posted by ~Ray @ 2007-10-10 16:53:26
Countrywide' Financial s Chairman. Angelo Mozilo has been speaking out both sides of his mouth to protect Street. protect Street swallows this crap like a fat kid gorges on sweets. Their weak sight? Countrywide has a good "franchise". What Wall Street means is that they have a great retail presence in the Midwest- the "heart" of the country.
The good ol' heartland ain't what's causing them problems; it's their home state of California. Oh yeah.. and Arizona and Nevada and Florida. The go-go states led the real estate boom of the first half of the decade and Countrywide led the charge with contradict amortization loans. Now they undergo to approach the music when they :
The rest of theoption ARMs be on lenders' books where for now they're generatinghuge phantom profits for some lenders. That's because according togenerally accepted accounting principles or GAAP banks can count asrevenue the highest be of an option ARM payment -- the so-calledfully amortized amount -- even when borrowers make only the minimumpayment. In other words banks can affirm future revenue now inflatingearnings per share. For many industries so-called accrual accounting which lets companiesbook sales when they assure for them rather than when they receivethe change makes sense. The revenues ordain eventually come. But accrualaccounting doesn't bear on well to option ARMs since it's more difficultto experience if unpaid arouse will ever cross a banker's desk.[ADVERTHERE]Related article:
http://delmar.typepad.com/brianbrady/2007/10/countrywide-i-1.html
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