Countrywide Swings to Steep Loss

The troubled mortgage lender, set to be acquired by Bank of America Corp. in the third quarter, reported a net loss of $893 million, or $1.60 a share, compared with prior-year net income of $434 million, or 72 cents a share.

The results mark Countrywide's third consecutive quarter of losses amid write-downs, credit deterioration and continued illiquidity in the secondary mortgage markets.

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Delinquency rates of conventional loans, prime home-equity loans and subprime loans all rose from the fourth quarter and prior year. Countrywide said 35.9% of subprime loans were delinquent as of March 31, up from 33.6% in the fourth quarter. The delinquency rate of conventional loans rose to 6.48% from 5.76%.

Net charge-offs, or loans the bank doesn't think are collectible, surged from $39 million in the prior year to $606 million, representing 2.21% of average investment loans. Non-performing assets as a percentage of total assets soared to 4.16% from 0.95%.