Shares in local mortgage lenders and homebuilders sank Wednesday after one of the nation's largest lenders painted a bleak picture of its financial future and a report said that mortgage application volume fell.
Washington Mutual said Wednesday that the bank expects to see more loan losses well into next year as access to credit continues to tighten and the slumping housing market continues to slide.
"We expect today's challenging housing market conditions to continue throughout 2008," the firm's Chief Executive Kerry Killinger said, sending shares of mortgage lenders and homebuilders across the country tumbling.
Also, the Mortgage Bankers Association said monthly mortgage application volume for the week ending Nov. 2 fell 1.6 percent as refinance volume declined 3.2 percent and purchase applications fell 0.05 percent, the trade group said. Refinance applications accounted for 49.1 percent of total mortgage applications during the week.
Shares in Calabasas-based lender Countrywide Financial Corp. sank 7.2 percent to $13.94 while Santa Monica-based lender IndyMac Bancorp lost 15 percent to $10.65. Homebuilders were also hit, with Los Angeles-based KB Home dropping 3.4 percent to $25.29 and Calabasas-based Ryland Group Inc. losing 2.1 percent to $25.98.
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