Liz Rappaport
Countrywide shares have lost more than 60% of their value since they peaked in February just before rivals such as HSBC (HBC Quote - Cramer on HBC - Stock Picks) and New Century Financial began warning about a spike in defaults on recent-vintage subprime loans.
Since then, Countrywide and rivals such as Thornburg (TMA Quote - Cramer on TMA - Stock Picks) have come under increasing pressure. The market for mortgage-backed securities that the companies long depended on for short-term financing has dried up, forcing Countrywide in August to tap a bank credit line to fund its daily operations. Thornburg has been forced to take similar actions, selling parts of its portfolio for a billion-dollar loss and selling preferred stock at high rates of interest. Meanwhile, Mozilo has been busy selling his stock as fast as he can. Countrywide said earlier this month that even with all the stock Mozilo sold over the last year, he still had some options he hasn't cashed in -- in part because Countrywide shares had fallen below the threshold that triggered regular sales. Mozilo took care of that, Countrywide said, by selling the rest of the stock covered under a pre-arranged selling plan at prices below the pre-set floor. Mozilo did concede in a press release back on Oct. 5 that the stock "is currently under pressure." Countrywide shares fell 47 cents in after-hours trading to $16.88.
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