Countrywide Home Loans in Foreclosure Stages Rise

Countrywide Financial, the largest U.S. home mortgage lender, said on Thursday the share of its mortgage portfolio that faces foreclosure nearly doubled in March from a year earlier in a difficult housing market.

The mortgage company’s overall lending, however, rose by 5 percent in the month from March 2006 and is up 25 percent from February, suggesting that the lender is adding more market share as its weaker rivals pull back and industrywide volume contracts.

“Given its substantial pipeline, Countrywide’s loan origination volumes should hold up significantly better than the overall market, despite the very challenging conditions in the subprime mortgage segment,” said Credit Suisse analyst Moshe Orenbuch.

Countrywide, which services $1.35 trillion of home loans, said that pending foreclosures as a percentage of unpaid principal balances jumped to 0.83 percent in March from 0.44 percent a year ago and 0.80 percent in February.

Its foreclosures are based on the number of mortgage loans serviced rose to 0.69 percent from 0.47 percent the prior March but fell from February’s 0.70 percent.

A mortgage delinquency rate of 4.29 percent, versus 3.68 percent last March and February’s 4.71 percent, told the story.

Industrywide, foreclosures are rising and the home mortgage loan originations are declining as house price appreciation slows and lenders tighten their underwriting standards.

More than 30 subprime lenders, which make bad credit home loans to people with poor credit histories, have sold their businesses, quit the industry or gone bankrupt within the past 12 months alone.

Going against that trend, Countrywide mortgage loans in process increased by more than 8 percent in March compared with February and March 2006. The company has added 1,268 jobs this year, giving it 55,923, the most since July.

For the first quarter, its mortgage lending increased 9 percent to $115 billion.

Countrywide said it funded $43.28 billion of home loans in March, despite declines of 29 percent in both adjustable-rate and in “non-prime” loans, including subprime (bad credit home loan) lending products.

Mortgage company COO David Sambol said Countrywide’s home loan business is experiencing a “short-term volatility” but should benefit in the longer-term “as the marketplace rationalizes.”

Last month, the Mortgage Bankers Association said the industry-wide rate of foreclosure was 0.54 percent in the fourth quarter, the highest in its 37 years of surveys.

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