Washington Mutual, the largest U.S. thrift, said that conditions in the housing market are creating a perfect storm and will most likely force the company to borrow more money to cover bad loans.
The company may have to borrow an additional $500 million to cover those bad loans. Previously the company forcasted to borrow $1.5 billion to $1.7 billion for the full year.
The combination of rising delinquencies, higher foreclosures, more housing inventories, increasing interest rates on many mortgages and greatly reduced availability of mortgages due to limited liquidity is creating a near-perfect storm for housing, according to Chief Executive Officer Kerry Killinger.
"It now appears that housing and capital market corrections will be worse and longer lasting than even we expected," Killinger said.
All this adding up with the Countrywide Inc. layoff announcement and it all adds up to bad news. A possible recession could occur in no time.
0 comments:
Post a Comment