Crystal Ball on Mortgage Companies
Posted on November 14, 2007 - Filed Under Business |
A stock market analyst I am not. This is a subject I know nearly nothing about. If seeking more definitive information, Moom can assist you with his writings. Anything you read here is purely conjecture and speculation on my part.
Recently CountryWide announced they were going to do a huge re-write of loans in order to stave off defaults. This was a smart move on their part: a lender being proactive in trying to stem off possible problems. The stock market rewarded them by pushing their stock below $15 a share. A year ago, it was over $45.
Glancing at other mortgage companies, the same story plays out. The price today is nearly 1/3 of what it was a year ago.
Stated previously my Crystal Ball predicts 2008 as a bottoming out of the market. More news about defaults will surface. The mortgage companies stock will continue to fall as a result.
My belief is two events will occur. First, people are going to continue to buy homes. Second, at some point in the future the market will once again begin an upward trek.
With that being said, 2008 may be a good year to go shopping for mortgage stocks.
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