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Last Updated: Tuesday, 24 July 2007, 15:57 GMT 16:57 UK
Rising defaults hit top US lender
A house for sale in Illinois
The US housing slump has caused problems for mortgage lenders
The largest US mortgage lender, Countrywide Financial, has slashed its full-year forecast after reporting a big fall in three-month earnings.

The housing market slump has led to rising defaults for mortgage lenders.

The Californian firm's second-quarter net income fell 33% to $485.1m (235.2m) - its third consecutive fall.

It has cut its full-year earnings outlook to between $2.70 and $3.30 per share, as against $3.50-$4.30 in April and $3.80-$4.80 in January.

Countrywide Financial's warning in March, that housing market problems would hurt its profits in the short term, unsettled Wall Street.

It has cut 108 jobs and tightened up its lending guidelines, as well as cutting back on the sub-prime lending that has caused default problems for mortgage lenders.

Countrywide's chief executive Angelo Mozilo did not predict any improvements this year.

"We expect difficult housing and mortgage market conditions to persist," he said.

"Softening home prices continued to affect many areas of the country and delinquencies and defaults continued to rise across all mortgage product categories," he added.

Wall St hit by home payment fears
13 Mar 07 |  Business
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