When the subprime mortgage collapse gathered speed two weeks ago, Eric Sieracki at Countrywide Financial (CFC – Cramer’s Take – Stockpickr – Rating) sought to calm his investors’ nerves.
“This is the pain phase of a healthy cycle,” the CFO said at an investment conference in San Francisco. “We’ve been through these kinds of cycles before and we’ve seen another day. … We’re a top-conditioned athlete.”
Doubtless that’s why his fellow executives and directors are throwing stock overboard on a heroic scale.
Insiders at Countrywide, the nation’s largest mortgage lender, have sold $314 million worth of shares in the company just since August. That’s according to regulatory filings tracked by Interactive Data Corporation.
The sales include a staggering $94.5 million by chief executive Angelo Mozilo, and $17.5 million by mortgage division chief David Sambol.
Read the rest of the article at The Street.
I think the subprime lending problems will spread to Alt-A and maybe even Prime loans. I think CFC will be affected (I don’t think it will go bankrupt) and I think the insiders feel the same way.