The firm has issued a profit warning and Angelo R. Mozilo, chairman and chief executive officer of Countrywide, stated they expected the difficulties in the housing and mortgage markets to persist into the second half of 2007.
This added to the warnings of the chairman of the US Federal Reserve, Ben Bernanke, that eventual defaults in the sector could eventually top $100 billion.
Ray Boulger, senior technical manager for John Charcol, said: “It is interesting the extent that the non-conforming market has moved over into the prime market. Obviously, there are some major differences between the US and UK markets and the UK non-conforming market is much better regulated. Any lender with interests in the US and UK will be well aware of the differences, but if they have a credit crunch in their main market, they will have to tighten up in the UK. The US problems will have an impact here, but it won’t be much, unless we start to see a fall in house prices.”
However, American-owned Rooftop Mortgages, denied issues its parent company Bear Stearns may face in the US would filter into its UK business. Ginny Darrow, chief executive officer at Rooftop, said: “The future for Rooftop in the UK is very positive and remains unaffected by the conditions in the US market.”
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