Shares in four area lenders dropped significantly Friday in the wake of a global mortgage crisis that has spooked the financial world over the past week.
Shares in Calabasas-based Countrywide Financial Corp. lost 5.7 percent, bringing this week’s decline to about 15 percent, marking the firm’s biggest drop in nearly three years. Shares have dropped 40 percent since early February.
Earlier this week the largest mortgage lender said that it has access to $46.2 billion in cash, credit lines and other investments, a move aimed at reassuring nervous investors the lender can weather a market downturn if need be.
Shares in Anworth Mortgage Asset Corp. also plunged Friday after the Santa Monica-based company said late Thursday that its Belvedere Trust business received a default notice from two lenders and likely will be forced to sell most of its assets to repay them.
The company said it invested $100 million in the Belvedere Trust and lent the unit another $42.8 million.
Shares lost $1.03, or more than 18 percent to $4.55 in afternoon trading Friday. Shares are down 51 percent since mid July.
Shares in IndyMac Bancorp. also dipped $1.13, or 5.5 percent, to $19.45 ending a streak where shares in the Pasadena-based lender had gained after being upgraded by a Roth Capital Partners analyst.
Shares in Fremont General were also down 10 cents, or 2.5 percent to $3.83.
The concern is mounting on Wall Street that the nation’s biggest lenders may face a cash shortage because investors who buy their loans aren’t buying and bankers have cut off credit lines. So far, 70 mortgage companies have been toppled and half a dozen hedge funds that bought their loans have also gone under, according to Bloomberg estimates.
Regulators in the U.S., Europe and Japan have responded by pumping more than $320 billion in cash into the banking system over the past week to prop up investor confidence a move the Federal Reserve said was unprecedented since the aftermath of the Sept. 11, 2001, attacks.
“We are experiencing home price depreciation almost like never before, with the exception of the Great Depression,” Countrywide’s Chief Executive Angelo Mozilo said during a conference call with investors at the end of July. He added that it would take all of next year for the mortgage market to turn around. Mozilo estimated that demand wouldn’t start to recover until 2009.
