Wall Street continued to batter shares of several local real estate companies amid the continuing subprime slide, which has been triggered by a rash of mortgage defaults.
Santa Monica-based subprime lender Fremont General was hit hardest, losing 8 percent Tuesday to close the day at $6.18. Shares in the company have lost 63 percent since December. Pasadena-based lender IndyMac Bancorp also lost 7.6 percent to $26.98.
Lenders weren't the only companies feeling the subprime pain. Homebuilders KB Home and Ryland Group Inc. both lost ground Tuesday, 5.3 percent and 5 percent, respectively. Even commercial real estate giant CB Richard Ellis Group Inc. lost 5 percent, to close at $31.97.
Countrywide's Chief Executive Angelo Mozilo said concern that subprime mortgage defaults will continue to surge are keeping qualified borrowers from buying homes, and amount to what he called an overreaction.
"This is now becoming a liquidity crisis, and an unnecessary one," Mozilo said in an interview on CNBC. "There's been a rush to judgment, an overreaction a baby being thrown out with the bathwater. There's no question about it."
More than two dozen mortgage lenders have ceased operations or sought buyers since the start of 2006 as loans to subprime borrowers, or those with poor credit histories, have begun to sour at record levels. Irvine-based New Century Financial Corp. was designated for delisting from the New York Stock Exchange Tuesday and was subpoenaed by the Securities and Exchange Commission regardeing its lending practices.
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