Countrywide Financial ( CFC) shares plunged for the second day in a row, after foreclosures more than doubled last month and concerns were raised about the beset mortgage lender's capital adequacy. Foreclosures in December more than doubled to 1.44% on the more than 9 million loans it services compared to a year earlier, according to Countrywide's monthly operational results. Delinquencies as a percentage of unpaid principal balance rose to 7.2%, up nearly 3 percentage points, it said.
They Just Don't Get Rumors!
That said, total loans funded last month rose 1% from November, despite falling 45% from the year-earlier period, to $24 billion, the Calabasas, Calif.-based company said. Countrywide's daily average mortgage application activity totaled $1.5 billion, down 21% from mortgage application activity in November. The mortgage loan pipeline totaled $35 billion at Dec. 31, down 18% from a year earlier. "Our fourth quarter ended with a number of positive operational trends," said David Sambol, Countrywide's president and COO. "Management is pleased with the progress we have made in positioning the company to navigate the current challenging environment." Sambol said that total loans funded in the month of December were "ahead of our forecasts," fueling fourth-quarter loan fundings to $69 billion, which exceeded the company's expectations. Still, the stock fell as much as 19% Wednesday, one day after Countrywide slumped to a 52-week low, as rumors swirled that the nation's largest mortgage lender was about to file for bankruptcy, sending shares tumbling more than 28% lower. The company denied the rumors. More recently, Countrywide shares were down 9.7% to $4.94.