
Customers of Countrywide Bank in California came in droves to the branch offices, phone lines and Web site to get their money out of it for fear the bank will declare bankruptcy.
The concerns stem from Countrywide Bank parent Countrywide Financial Corp., the mortgage lending company under extreme pressure from the fallout of risky loans.
Branch offices were especially crowded as customer service via the phones and web site weren't satisfactory, which evidently caused more concerns for consumers. Most people couldn't get through to the bank on the toll-free phone number, and the Web site was extremely slow they asserted.
So many customers showed up at the banks to get their money that they had to leave their names.
Countrywide Financial Corp. had to borrow $11.5 billion from its credit line from 40 banks on Thursday to give it operating capital to continue making loans and grow. While it will help the company, it signaled even more problems for investors who became even more concerned because the company had to tap its credit line.
When executives from the company were asked how the run on the bank would impact its strategy, they refused to comment.
In a statement, the bank said: "It is very important to remember that Countrywide Bank is well capitalized, with FDIC-insured deposits, and is one of the largest banks in the United States, with assets over $107 billion."
The parent company recently said they would start to almost exclusively offer Fannie Mae and Freddie Mac approved loans to stop the bleeding. They added that most the riskier loans will no longer be offered.
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» Countrywide Financial Eliminates 500 Subprime Jobs from ManagersRealm
Countrywide Financial Corp. has been under scrutiny as the largest mortgage lender in the United States, and is obviously a bellweather of the industry. Today they announced they are cutting 500 jobs in the Wholesale Lending Division and Full Spectrum... [Read More]
Tracked on: August 20, 2007 10:32 PM | Permalink to Trackback