Countrywide Investment Eyed by Buffett

0

Word that billionaire investor Warren Buffett may try to acquire a piece of beleaguered mortgage lender Countrywide Financial Corp. sent the company’s sharers up more than 10 percent Tuesday, marking the first increase in the stock in two weeks.


The Wall Street Journal reported that Countrywide’s debt-servicing business and its portfolio of mortgages and mortgage-backed securities may be an attractive investment for the billionaire.


Two weeks ago Buffett’s investment company, Berkshire Hathaway Inc., said it had made an investment in Bank of America Corp. adding to its sizable and long-standing investment in Wells Fargo & Co, the nation’s second largest mortgage lender behind Countrywide.


This comes the same time that the Calabasas-based lender announced it had cut 500 jobs from its Wholesale Lending Division and its Full Spectrum Lending unit, which both lend in the non-prime realm. Countrywide said last week it was going to cut jobs but didn’t say specifically how many.


“Approximately 500 positions have been eliminated across the country. The company will monitor market changes and production levels on an ongoing basis and respond as appropriate,” Countrywide said in a statement.


The Journal said that Buffett has been increasing his stake in financial services companies of late, including those with significant exposure to the mortgage market and he was also quoted on CNBC saying the worsening credit and housing markets may present some “real” investment opportunities.


Shares in Countrywide were up $2.11 cents, or 11 percent, to $21.92 in afternoon trading Tuesday on the New York stock Exchange. This is the first time that stock has gained ground since Aug. 6.

No posts to display