Zeev's Turnips Patch-No Politics (ZEEV)

[marketmaven]

CFC Passes the Trash -Game coming to an end
Countrywide reports November 2005 Operational Results.
http://ladondosfunkyanalysis.blogspot.com/2005/12/cfc-passes-trash.html

Mortgage loan fundings for the month of November were $42 billion, a 35 percent increase from November 2004. Year-to-date mortgage loan fundings totaled $447 billion.

This is what caught my eye however:

Pay-option loan fundings for the month were $7.9 billion, as compared to $4.1 billion in November 2004.

Interest-only loan volume was $8.9 billion for the month of November 2005, which compares to $5.9 billion, for the same period a year ago.

Nonprime loan fundings totaled $3.9 billion in November, which compares to $3.5 billion for the same period last year. Year-to-date nonprime fundings were $40 billion.

Total assets at Countrywide Bank totaled $72 billion at November 30, 2005, an increase of 86 percent from November 30, 2004.

That's actually a stunning increase in "assets".

But what did they do with their riskiest loans?

Of the $7.9 billion in pay-option loans in November 2005 Countrywide Bank retained $1.5 billion of them.

Of the $8.9 billion in interest only loans in November 2005 Countrywide Bank retained $0.3 billion of them.

If my math is correct, Countrywide managed to pass $15 billion out of $16.8 billion (89.29%) of their riskiest loans on to investors starving for yield.

As long as the trash can be passed, these predatory companies can continue to grow.