Stocks Drop for Lenders, Homebuilders

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Shares in local mortgage lenders and homebuilders fell sharply Wednesday as jittery investors unloaded stocks after more ominous housing data was reported.


The National Association of Realtors said Wednesday morning that pending sales of existing homes fell in July to the lowest level in nearly six years. This news comes after the NAR reported that home sales fell in July for the fifth-straight month, leaving the U.S. housing market with its biggest glut of unsold homes in nearly 16 years.


Shares in Pasadena-based lender IndyMac Bancorp shed 7.3 percent Wednesday to $22.25 while fellow lenders Fremont General Corp. lost 2.3 percent, to $4.34 and Countrywide Financial fell 3.5 percent, to $19.12. Shares in Fremont have lost 63 percent over the past two months while shares of Countrywide have been cut in half over the same span. Shares in IndyMac have lost 30 percent.


Investors are concerned about spreading fallout from what started as a subprime slide and is now a broader real estate slump.


Along with lenders, local homebuilders have also taken it on the chin as a result of Wall Street’s uncertainty. Shares in Los Angeles-based homebuilder KB Home Wednesday dropped 4.9 percent to $29.26 while Calabasas-based Ryland Group Inc. saw shares shrink by 3.7 percent to $28.57.


This also comes after one of Ryland’s largest institutional holders, Tontine Capital Partners, sold 307,000 shares, or $8.8 million worth of stock, at an average price of $28.60 each on Friday. Tontine now holds about 4.2 million shares, or 10 percent of Ryland.


Shares in Ryland have lost nearly 30 percent over the past two months while shares in KB have slipped 25 percent.

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