Countrywide Fourth quater loss

The tanman said they are going to be profitable in fourth quarter. Well it's fourth quarter and they lost $422 million. If it was not for BOA deal, it would have been on the brink of bankruptcy.

And it is still going to get worse as foreclosures are still going up. So expect more losses. Most people are expecting BOA to lower the price it paid for Countrywide. There is also no clarity on what will happen to Countrywide bonds. So stay tuned.

Foreclosures doubled to 1.44 percent of unpaid principal in December from 0.7
percent a year earlier at the servicing unit, Countrywide said on Jan. 9.
Overdue loans increased to 7.2 percent from 4.6 percent.

Absent a merger, Countrywide would likely have been downgraded to
non-investment grade status, Napoli said, reducing the value of the company's
servicing business that he called ``its greatest asset.'' The servicing unit
handles billing and collections for Countrywide as well as other mortgage
holders and investors.

Mozilo, 69, previously confirmed he's facing an informal U.S. inquiry into
his stock sales. Mozilo has sold about $450 million of Countrywide shares during
the past four years, according to the New York comptrollers' lawsuit.

Another article in WSJ discusses what we already knew about Countrywide's deal with BOA - That it was driven by fear. Countrywide feared it would face more scrutiny for FHLB borrowings. Without the deal, it's ratings would have been dropped to junk levels.

...But advisers to Countrywide's board -- including representatives of
Promontory Financial Group, a Washington consulting firm headed by Eugene
Ludwig, a former U.S. bank regulator -- saw the risk that the FDIC would start
asking tougher questions about the safety of funding Countrywide's large
mortgage holdings through those insured deposits, people familiar with the
discussions say. These people viewed the FDIC's chairman, Sheila Bair, as a
tough regulator willing to take on the big players.

Another threat to the deposit base was that further cuts in Countrywide's
credit ratings could prevent it from placing funds from custodial accounts at
its savings-bank subsidiary, the company has disclosed.