Countrywide Home Mortgage
Bonds
Company History
Countrywide Home Mortgage Bonds
are offered by Countrywide Financial
Corporation. Countrywide Financial
Corp. is a financial and investments
institution that is mostly engaged
in home mortgages and loan related
dealings. As of July 1st 2008,
Countrywide Financial Co was
bought over by the Bank of America
for $4.1 Billion in stock.
Countrywide Home Mortgage
Bonds is a huge industry. It
is estimated that Countrywide
accounted for approximately
20% of USA’s home mortgages
which equals to around three
and a half percent of the countries
Gross Domestic Product.
Their main business activities
include Mortgage
Banking, including issuing
loans, mortgage bonds and mortgage
services. It is the largest
company in this sector.
It’s banking sector
is aimed primarily to invest
into mortgage loans and mortgage
bonds.
It trades in capital markets
primarily with its equity and
Countrywide Home Mortgage Bonds.
Capital markets are markets
that institutions can borrow
or lend long term financial
funding to. It is primarily
made up of equity and bonds.
For short term financing, institutions
will instead got to the money
market.
Countrywide Finance Corp.
also provides mortgage services
like application processing
worldwide. The biggest sector
still comes from mortgage banking
which feeds their other sectors
as all are interrelated and
based on mortgages. 60% of their
revenue comes just from home
mortgages.
Countrywide Home Mortgage
Bonds
Countrywide Home Mortgage
Bonds are primarily traded in
the capital market. The capital
market acts as a bonds
broker dealer. It also is
where residential home loans
are managed and commercial mortgages
are funded from. This segment
is how CFC raises capital for
its home loans and ensures it
keep a debt to equity ratio
to meet federal guidelines.
CFC also operates capital market
trading in the UK and Japan.
CFC only trades Countrywide
Home Mortgage Bonds with other
institutions like banks, governmental
businesses, insurance companies,
hedge funds, large investment
companies, EPF companies and
other depository institutions.
Its commercial
mortgage bonds however have
individual and private investors.
Mostly these are the owners
of the commercial properties.
Countrywide Asset Management
Corp usually handles taking
over and releasing third party
loans and that of Countrywide
Home Loans. These loans primarily
consist of delinquent loans
that they hope to reignite using
Countrywide Home Loans services.
The loans will then be securitized
as Countrywide Home Mortgage
Bonds. Loans that can’t
be securitized are liquidated
either through foreclosure or
claiming insurance from governments
as most of these home loans
had originated by rulings from
the Federal
Housing Administration and
the Veterans Administration.
Most loans issued under rulings
by these governing bodies have
guarantees placed on them to
safeguard finance companies
like Countrywide Finance Corp.
After the delinquent loans
are securitized they can be
traded on secondary markets
of the capital market. Countrywide
also has underwriting services
that look into the risk of
buying new mortgage bonds
from smaller lending institutions
that they then hope to resell
to investors.
http://en.wikipedia.org/wiki/Countrywide_Financial_Corporation
http://my.countrywide.com/
http://www.nytimes.com/2008/01/11/business/12bank-web.html?hp
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Copyright
2008