Saturday, August 18, 2007

Fed Cuts Discount Rate to Save Countrywide?

National Mortgage News writer, Paul Muolo, says in an article that there was a run on a Countrywide branch in Pasadena, CA the other day. He goes on further stating that Bernanke & Co. cut the discount rate to give a hand to Countrywide with its 16% market share through its $1.4 trillion mortgage servicing portfolio (8.9 million homeowners). Countrywide also owns a thrift with $60 billion in liabilities.

I guess the thinking is that Countrywide needs the rate slash to borrow money to continue it's operations as it's downfall would be a psychological blow that Americans won't be able to handle.

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