Countrywide Sees Drop in Mortgages

Countrywide Financial Corp. said Monday that mortgage funding in November fell 24% from the previous month as loan refinancing and home purchases slowed.

Calabasas-based Countrywide, the nation’s second-largest mortgage lender, lent $22.2 billion, down from $29 billion in October.

Purchase loan volume fell 20% to $9.85 billion and refinanced loans dropped 26% to $12.4 billion. Average daily application volume remained at $1.5 billion.

Demand for mortgages is slowing in the U.S. as a seasonal lull in the real estate market reduces home sales and higher interest rates dent demand for refinancing. Sales of existing homes fell last month to a 6.35 million annualized pace, from a record 6.68 million in September, according to the National Assn. of Realtors.

Refinancing activity is expected to fall 80% to $434 billion next year from $2.19 trillion in 2003, according to the Mortgage Bankers Assn.

U.S. sales of new and existing homes probably will rise 6.2% to 6.94 million this year, from a record 6.54 million in 2002, and then fall 6.7% to 6.48 million in 2004, the Washington-based trade group said.

The average U.S. rate for a 30-year fixed mortgage probably will be 5.8% this year and 6.2% next year, compared with 6.5% in 2002, the MBA said.

Countrywide’s November funding level was down 31% from the $32.2 billion lent in the year-earlier month. Although funding fell, the company’s servicing portfolio -- the loans it administers for a fee -- rose to $631.5 billion, 45% higher than a year earlier.

The company changed its name a year ago to Countrywide Financial Corp. from Countrywide Credit Industries Inc.

Despite Countrywide’s lower loan funding in November, investors pushed its shares up 60 cents to a record $108.30 on the New York Stock Exchange on Monday. Although analysts expect the company’s earnings to decline in 2004, the stock is priced at about eight times analysts’ average 2004 per-share estimate -- which may be attracting “value” investors to the stock.