The news coming out of the nation's largest home mortgage lender just keeps getting worse. Countrywide Financial Corp. on Thursday reported another month of steep declines in lending, and North Carolina's State Treasurer said he is seeking an SEC investigation into Angelo Mozilo's stock-selling practices.
Countrywide said that September mortgage lending fell 44 percent from the same period a year earlier as decreased demand, tightened underwriting standards and surging delinquencies pushed activity down.
Mortgage loan funding for the month totaled $21 billion, down from $38 billion in the previous year. Delinquencies rose to 5.9 percent up from 4 percent.
Funding for adjustable-rate mortgages also slid 76 percent and nonprime loan funding tumbled 92 percent as the lender continues to cut back on the riskier loans.
Separately, Richard Moore, the North Carolina state treasurer, formally asked the U.S. Securities and Exchange Commission to investigate the timing of stock sales made by Mozilo, Countrywide's chief executive.
Moore is the trustee of a state pension fund that holds more than $10 million in the Calabasas-based lender's stock. Moore said in a letter, dated Oct. 8, that he was "shocked" to learn that Mozilo "apparently manipulated his trading plans to cash in" as the subprime crisis was heating up.
Moore cited reports that Mozilo had sold nearly 5 million shares in Countrywide between Nov. 2006 and Aug. 2007 netting him nearly $140 million in proceeds.
Countrywide could not be reached immediately for comment.
Despite the bad news, shares in the lender were off only 5 cents to $18.75 in afternoon trading Thursday on the New York Stock Exchange.
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