Does anyone still think CFC will survive as is?

[c1ue]

http://countrywide-foreclosures.blog...ff-charts.html

195,495 REOs

Assuming $250K/per - that's about $50B worth of inventory they will be moving.

While CFC owns a big chunk of the loan business, unless this represents all of the REOs incoming - doesn't look too good for either CFC's survival or the chance of a R.E. 'recovery'.

As a note, 89,030 are 'no broker assigned' therefore being held as inventory.

[jk]

Re: Does anyone still think CFC will survive as is?

i gather that large number of reo's was pulled, and the number is now 13k.
also henry cisneros just resigned from the board. [to spend more time with his family?] i have no idea of the meaning of these facts. in the meantime cfc is supposedly "working out" mortgages but it is not clear to me whether these are mortgages owned by cfc or just serviced by cfc. anyone know? and if the latter, does that mean they have to clear any deals with the myriad of cdo owners who own various interests in their mortgages? my understanding had been that cfc was unable to renegotiate much because of the mortgage ownership complexities. did something change?

[metalman]

Re: Does anyone still think CFC will survive as is?

i gather that large number of reo's was pulled, and the number is now 13k.
also henry cisneros just resigned from the board. [to spend more time with his family?] i have no idea of the meaning of these facts. in the meantime cfc is supposedly "working out" mortgages but it is not clear to me whether these are mortgages owned by cfc or just serviced by cfc. anyone know? and if the latter, does that mean they have to clear any deals with the myriad of cdo owners who own various interests in their mortgages? my understanding had been that cfc was unable to renegotiate much because of the mortgage ownership complexities. did something change?

my quick careless read of the headline was: "will KFC survive?"

then i got this brilliant idea. the folks that bought these homes still gotta eat.

here's my $22B hedge fund idea: short CFC and long KFC. what do you say?

[zoog]

Re: Does anyone still think CFC will survive as is?

my quick careless read of the headline was: "will KFC survive?"

then i got this brilliant idea. the folks that bought these homes still gotta eat.

here's my $22B hedge fund idea: short CFC and long KFC. what do you say?

Yum! Brands (KFC, Pizza Hut, Taco Bell) has been doing well overseas. Domestic business has slowed.

With an average of one KFC or Pizza Hut store opening every day in China, the country continues to lead the Louisville company's overseas growth. Latin America, South Africa and India also have been bright spots in recent months, and a move to merge a Russian chicken chain called Rostik's with the KFC brand was going smoothly, Novak said.

Domestic profit will be flat this year, partly because of slumping sales at Taco Bell, Novak said. The domestic business also faces challenges such as a rising minimum wage and soaring commodity costs for items such as cheese at Pizza Hut.

link

As for CFC, it's little more than a gut feeling, but I believe they are unraveling. As in all the way to insolvency.

[c1ue]

Re: Does anyone still think CFC will survive as is?

There is some debate as to whether all of the posted homes were present, past, future, or some combination of, REOs.

However, my view is as follows:

1) The posting is very unlikely to be false. This would imply an active creation of bogus data which is in no one's interest

2) If all of the data is sum total from the last 7 years of CFC's operations, this is still bad. Unlikely, however, as foreclosures/REOs have been extremely rare from 2001 to 2005 - as default rates from this period show.

3) If the sum total includes present as well as future REOs, this is bad.

4) If the sum total excludes future REOs, this is worse.

I don't see any scenario except 1) where it bodes well for CFC.

The comments on the article show some old data, but also apparently a number of foreclosures not included in the list.

The only way to minimize this damage besides 1) is for this list to include ALL REOs CFC has touched in some way - i.e. not just Countrywide owned REOs, but REOs owned by other entities for which Countrywide is providing servicing.

Even then, $50B+ of REOs bodes poorly for the overall capitalization of the mortgage industry.

[DemonD]

Re: Does anyone still think CFC will survive as is?

CFC to zero.

A good short/put play - even now.

[SeanO]

Re: Does anyone still think CFC will survive as is?

http://countrywide-foreclosures.blog...ff-charts.html
195,495 REOs inventory.

I took a quick look and compared to my foreclosure records since beginning of 2006. I randomly sampled 10 records from the 188 pages of records. 4 of the 10 went back to Countrywide at auction within the last 3 months. 6 of the 10 have no recent foreclosure activity. As such I think this list either includes a lot of historical properties, or perhaps they accidentally published properties that are not yet in foreclosure.

As to whether or not they survive as is, I don't think so.

We have 8,500 homes ($3.5B in loans) per month going back to the banks in CA right now. These properties first defaulted 6 months ago, well before the liquidity crunch, well before the peak in arm resets this month, and well before sales dropped off a cliff (only 24,460 new and resale homes sold in CA in sept). Hard for me to see how we won't at least double current foreclosure sales volume by the end of 2008 as these additional impacts work there way through.

SeanO

[c1ue]

Re: Does anyone still think CFC will survive as is?

4 of the 10 went back to Countrywide at auction within the last 3 months. 6 of the 10 have no recent foreclosure activity.

Sean,

Keeping in mind 18-24 month foreclosure cycle, how did you define recent?

[SeanO]

Re: Does anyone still think CFC will survive as is?

Sean,

Keeping in mind 18-24 month foreclosure cycle, how did you define recent?

No foreclosure activity since beginning of 2006.

SeanO

[c1ue]

Re: Does anyone still think CFC will survive as is?

Sean,

No foreclosure activity since beginning of 2006 implies that these are indeed 'pipeline' foreclosures.

Given that the subprime/ARM resets have only just begun, maybe I'm not Chicken Little after all :rolleyes:

[SeanO]

Re: Does anyone still think CFC will survive as is?

Sean,

No foreclosure activity since beginning of 2006 implies that these are indeed 'pipeline' foreclosures.

Given that the subprime/ARM resets have only just begun, maybe I'm not Chicken Little after all :rolleyes:

I'm long overdue for a post on this subject. I will try to do so now with my two cents.

SeanO

[Jim Nickerson]

Re: Does anyone still think CFC will survive as is?

I'm long overdue for a post on this subject. I will try to do so now with my two cents.

SeanO

Yes, I agree with your introspection, but 2cents ain't what it was a 100 years ago, so make it your 20.00 bonars worth. I look forward to it when you have the time, Sean.