Countrywide Financial Corp., the home lender that has lost three-quarters of its market value this year, fell in New York trading after chief executive Angelo Mozilo decried the housing market’s credit shortage.
Mozilo, speaking at a Washington housing conference, said Fannie Mae and Freddie Mac, the two biggest sources of mortgage funds, should try harder to help homebuyers and investors in mortgage securities. Washington Mutual Inc. CEO Kerry Killinger also cited “very scarce” funds for loans that don’t meet guidelines of the two government-backed entities.
“I don’t think there’s a conflict between being safe and sound and playing a greater role in this marketplace,” Mozilo said. “It’s very important for Fannie Mae and Freddie Mac to step up. It’s the only way out of this to shorten the cycle. Otherwise, it’s going to be very painful.”
Countrywide, based in Calabasas, Calif., is the largest U.S. originator of residential loans. Seattle-based Washington Mutual ranks sixth.
Countrywide lost 14 cents, or 1.3 percent, to $10.68 a share while Washington Mutual gained 12 cents, or 0.6 percent, to $19.62 in regular trading on the New York Stock Exchange.
The housing market continues to weaken, forcing Fannie Mae to be “as careful as anyone else is,” when buying or guaranteeing mortgages, CEO Daniel Mudd said at the conference. He urged industry leaders to develop clearer definitions and standards for subprime mortgages typically made to borrowers with weak credit histories.
