Top 3 Bears Arguments
Non-Prime Mortgage Pressure: Losses due to non-prime mortgage defaults resulted in a 33% decrease in quarterly profits for Q2 2007, causing year end forecasts for company-wide revenues to be lowered by 10.5%.
Stigma Stemming from Racial Bias Suits: Countrywide has been sued by four African Americans, as well as the NAACP, in class action lawsuits claiming that Countrywide and its affiliates use discriminatory methods to increase closed mortgage rates.
Stock Price has fallen 25%: Due to problems earning forecasted revenue within the Mortgage Banking segment, investors have lost confidence in Countrywide to weather the non-prime market headwinds, casing the stock price to plummet 25% from July 20th to August 3rd, 2007.
