Countrywide Falls as Schumer Seeks Probe
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Countrywide Financial Corp. fell more than 10% in New York Stock Exchange trading after Senator Schumer urged the regulator of the Federal Home Loan Bank system to probe cash advances to the largest American mortgage lender. Mr. Schumer said he was alarmed by the volume of advances the system’s Atlanta bank has made to Countrywide considering “the rapid deterioration” in the credit quality of some of the Calabasas, Calif.-based company’s mortgages. Schumer expressed his concerns in a letter sent yesterday to Federal Housing Finance Board Chairman Ronald Rosenfeld. The Atlanta bank has made $51.1 billion in advances to Countrywide as of September 30, representing 37% of the bank’s total outstanding advances, Mr. Schumer wrote, citing U.S. Securities and Exchange Commission filings.
