Mortgage Lending and Financials were not the place to on Thursday (and the rout is continuing so far today). Here is Thursday’s scorecard:
- GMAC, the home and auto lender formerly owned by General Motors Corp.reported a $1.6 billion loss on lower demand for mortgages and higher provisions for failed loans and impaired assets.
- Radian (RDN) , the third-largest U.S. mortgage insurer, reported a $703.9 million loss after writing off $468 million on a unit that invested in subprime mortgages.
- MGIC Investment Corp. (MTG), the largest U.S. mortgage insurer, declined $2.25, or 12 percent, to $17.11.
- Washington Mutual Inc. (WM), the largest U.S. savings and loan, fell 7.6 percent.
- Countrywide Financial Corp. (CFC), the biggest U.S. mortgage lender, lost 7 percent.
- MetLife (MET) slipped 4.8 percent
- Conseco (CNO) dropped 10 percent, the most since emerging from bankruptcy in 2003.
- American International Group (AIG), the world’s largest insurer, fell 6.1 percent.
- MetLife (MET) lost $25 million from its $1.8 billion of investments in 25 hedge funds in the third quarter, Chief Investment Officer Steven Kandarian told analysts on a conference call today. The New York-based company had another $47 million of losses linked to investments in homebuilders and CDOs.
- Ambac (ABK) bonds were downgraded to “deteriorating” from “stable” by Gimme Credit Publications Inc. because of the world’s second-largest bond insurer’s risk from CDO obligations.
GMAC is majority owned by a buyout group led by New York-based Cerberus Capital Management LP. GMAC’s results included a $2.3 billion loss at its Residential Capital LLC mortgage unit.
The above synopsis thanks to Bloomberg.
I am still trying to figure out how anyone could possibly have been interested in buying GMAC from GM. Even more puzzling was GM’s reluctance to part with all of it as opposed to 51% of it.
Urgent Message From Citigroup
The Mortgage Lender Implode-O-Meter is noting an Urgent Policy Notification from Citigroup: Effective October 31st 2007, Citi Home Equity will discontinue lending on all Purchase Money transactions for properties in California.
It’s too bad that Citigroup sold its umbrella in February. What are those California clients supposed to do in this downpour?
Then again, given the Question of Solvency at Citigroup, perhaps Citigroup needs that umbrella more than its client do.
Why is it there is never an umbrella when you need one?
By the way it’s Minyan Peter who deserves the credit for this umbrella quip. He was all over Citigroup’s case on October 2 in A Look Inside Citigroup’s Writedowns.
Mike Shedlock / Mish/