Countrywide insiders selling and mortgage rates
The fact that Federal Reserve and Mr. Ben Bernanke opted not to raise federal funds rate and leave it at 5.25%, gives us little comfort. That was expected, and the prime interest rate stays at 8.25% for now. You can see however that many bet on higher prime rate ahead. As we did previously with the construction companies and builders, notably with insider selling in Toll Brothers, we checked the largest lender which is currently Countrywide Financial Corporation. What we saw was quite worrisome and indicative, we think, of a major slowdown in mortgage industry, due to the rising interest rates and housing oversupply. Countrywide president Stan Kurland just left the company after 28 years of service. What wasn't obvious is that he and other insiders have sold huge chunk of Countrywide stock, and exercised stock options. From September 12, Mr. Kurland alone sold something close to $130,000,000 worth of stock, according to my calculations. Why did he and others do that? Evidently they expect further slowdown in real estate market. What it means for average Joe and Jill? Bad news if you must sell, and that has been going on for quite a while, but will likely get much worse. Good news if you are buying, as buyers will find many bargains. That is if you can sell your existing property. On the lending front, banks and mortgage companies will have to get very flexible going after whatever business is still out there.
Thu Sep 21, 2006 11:09AM | Copyright: www.bad-credit-advisor.com | More in Personal Finance | Comments (0)
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