Countrywide Financial might go under, analyst says
Uncategorized August 16th, 2007
More bad news for the mortgage industry. All the speculation over the boom years is finally coming to an end. Countrywide Financial, the largest mortgage company in the US said that it is drawing down an entire $11.5 billion credit line as a global credit shortage limits its access to short-term cash.
Countrywide has already said mortgage that delinquencies have reached their highest level in more than five years. Analyst are wondering if Countrywide might be able to survive.
If you have been reading this blog for a while, this should not come to you as a surprise. The US economy and many other economies around the world have been fueled by way too cheap and easy money. The housing market has definitely been fueled by too easy credit. The hedge funds have been making money left and right by speculation with this cheap credit. Well, the party is over. Sooner or later, common sense and the basic rules or economics prevail and we’re in this process right now.
