Angelo Mozilo, chairman and chief executive, said: "Looking forward to 2007, the industry will likely see continued pressure on margins as mortgage origination volumes decline and industry capacity is rationalised.But always look on the bright side: all those put-option ARMs and cash-back mortgages will magically disappear by 2008, and we're off to the races again:
"We are also preparing for increased borrower delinquencies and continued credit deterioration."
Mr Mozilo's remarks came as Countrywide said fourth-quarter earnings fell from $639m in 2005 to $622m last year, a 3 per cent drop. Wall Street analysts were expecting a slightly stronger performance. Revenues rose 6 per cent, from $2.59bn to $2.76bn.
But Mr. Mozilo also offered a dose of optimism. Reiterating a statement he made in October, he said that 2007 "will likely be the trough year of the current housing cycle" and that 2008 "should represent the beginning of upward trends associated with the next cycle."Countrywide traded up a few points last week on reports that B of A might buy them. It could happen. But B of A would be stupid to do it. They'd be acquiring a portfolio full of foreclosure time bombs.
Still short? You bet.
Bonus: Countrywide did well offloading their mortgages to dumbasses:
Quarterly profit at Countrywide's core mortgage-banking unit rose to $453 million from $434 million, which the company attributed to higher income from selling nonprime and home-equity loans to investment banks that repackage them into securities.
... but did poorly with the mortgages that they couldn't pawn off:
The company posted a lower profit from its loan-servicing sector, or billing and account-management business, partly because higher delinquencies drove down the values of its mortgage-servicing assets.