Is Countrywide in Trouble?

Did Angelo Mozilo, Countrywide Financial's Founder and Chairman, sound duplicitous in his comments to Wall Street earlier this year?

This is from an article I wrote on Bloodhound Blog in April:

That, folks, is the ticking time bomb.

Here are some warning signs the painfullly paranoid (like me) might feed upon:

1- Countrywide Announces Change in Board Of Directors

2- Fitch Ratings Agency Downgrades 33% of Countrywide Loan Pools; particularly their “expanded criteria” guidelines which include Pay Option ARMs

3- Methinks he doth protesteth too much; Chairman and Founder Angelo Mozilo sold $140 million worth of stock last year while literally screaming that Countrywide should not be penalized by stock traders because of the subprime meltdown.

I was concerned that the large amount of negative amortization loans Countrywide originated would potentially stop performing.  Many borrowers really don't know what sort of loan product they have.  That would fall back on the originating lender for non-disclosure.  The loan holders (investors) would backlash as the securities firm that sold them the junk loans.  Countrywide Securities sold them the loans from Countrywide Home Loans. 

All of the treacherous roads lead to the parent company, Countrywide Financial.  Now, Wall Street insists that Countrywide is impervious to the liquidity crunch because they own a bank.   Of course, home equity lines of credit are a Countrywide Bank product, not a Wall Street product, like Pay Option ARMs.  I guess we'll be looking at a banking crisis, like we saw in 1989, next year.

Come on Wall Street, wake up and smell the coffee !  The sooner we take this hit, the faster we can take corrective action and move on with our lives.