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ST. LOUIS NEWS TODAY - Sunday, August 19, 2007
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Countrywide Supplements Funding Liquidity Position
ST. LOUIS, MO (SLFP.com), August 19, 2007 - Countrywide Financial Corporation has announced that it has supplemented its funding liquidity position by drawing on an $11.5 billion credit facility. In addition, the Company has accelerated its plans to migrate its mortgage production operations into Countrywide Bank, FSB.
"As we have previously discussed, secondary market demand for non-agency mortgage-backed securities has been disrupted in recent weeks," said David Sambol, President and Chief Operating Officer. "Along with reduced liquidity in the secondary market, funding liquidity for the mortgage industry has also become constrained.
"For many years, Countrywide's liquidity management framework has focused on maintaining a diverse, multi-layered assortment of financing alternatives," said Sambol. "A primary component of this framework is a committed, unsecured credit facility of $11.5 billion provided by a syndicate of 40 of the world's largest banks. In response to widely-reported market conditions, Countrywide has elected to draw upon this entire facility to supplement its funding liquidity position. Over 70 percent of this facility has an existing term greater than four years and the remainder has a term of at least 364 days.
"Countrywide has taken decisive steps which we believe will address the challenges arising in this environment and enable the Company to meet its funding needs and continue growing its franchise. Importantly, in addition to the significant liquidity which we have accessed from our bank lines, the Company's primary strategy going forward is to fund its production through Countrywide Bank, FSB. We are already originating in excess of 70 percent of our total origination volume through the Bank, and expect to accelerate our strategy so that nearly all of our volume will be originated in our Bank by the end of September.
"Furthermore, as a result of lessened liquidity for loans which are not eligible for delivery to the GSEs, Countrywide has materially tightened its underwriting standards for such loans, and, we now expect that 90 percent of the loans we originate will be GSE-eligible or will meet our Bank's investment criteria.
"Our objective is to navigate the difficult conditions in today's market as we complete the transition of our Bank business and funding strategy," Sambol concluded. "With these changes, we believe we are well-positioned to leverage opportunities presented by a consolidating industry."
College Students Should Beware of Easy Credit Offers
JEFFESON CITY, (SLFP.com), August 19, 2007 - Attorney General Jay Nixon is reminding college students and their parents to be careful when heading to campus this year. Nixon says students will face an increasing onslaught of offers from credit card companies, payday lenders and others hoping to capitalize on the back to school population.
Nixon urges students to think twice before accepting t-shirts, food coupons or other incentives for filling out a credit card application. For the majority of students who already have at least one credit card, Nixon reminds them to use their credit wisely.
In a statement, Nixon said, "When you're low on cash, it may be tempting to use a credit card for things like pizza, entertainment or clothes, but those bills quickly add up and become overwhelming. Making the minimum payment each month also seems enticing, but that creates a runaway train of debt that's hard to ever catch."
With a $3,000 balance at 19 percent annual interest, a $60 monthly payment will take nine years to pay off and cost more than $6,000. Students can stop the flow of pre-approved credit card offers by opting out at www.optoutprescreen.com.
Nixon also cautions against payday loans, another tempting offer of quick cash. In Missouri these loans charge an average of 400 percent annually. Many payday loan customers find it difficult to pay off their loan, so they renew their loan, which also leads to runaway debt.
Parents can consult a qualified financial planner to help make good decisions bank accounts, credit, debit and ATM cards, and other financial resources for their children.
Since the threat of identity theft is also very real on college campuses, students need to be cautious with their personal information. Nixon says sensitive documents with bank account, credit card or Social Security numbers need to be kept in a safe location, away from the curious eyes of roommates, friends and other visitors in college housing. Also, Nixon recommends students object if a school uses their Social Security number as a student identification number.
To further protect personal information, college students should keep their computers updated with anti-virus software, spyware detection and a firewall.
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