Countrywide Swings to $893 Million Loss

Countrywide Financial(CFC Quote) reported a first-quarter loss far beyond Wall Street's worst expectations on Tuesday, as the mortgage lender boosted its reserves to cover bad loans due to a severe downturn in the U.S. housing market.

The Calabasas, Calif.-based company lost $893.1 million, or $1.60 per share, compared with a profit of $434 million, or 72 cents per share, a year earlier. Analysts' predictions varied from a loss of 88 cents per share to a profit of 80 cents per share, according to Thomson Financial. The average estimate was a profit of 2 cents per share.

Countrywide was forced to write down assets last quarter and increase reserves to cover future losses as home values declined and homeowners continued to default or become delinquent on mortgage payments. The company posted $3.05 billion worth of credit-related charges across all its divisions and added $1 billion to its reserve for such losses, which now totals $3.4 billion. ...