Mortgage Lender’s Stocks Ripped by Subprime Exposure

A snapshot look at the returns of some of the highest profile mortgage lenders reveals significant losses to shareholders. The returns listed below represent the decline from the 52-week high to today’s 1:30 CST market price.

Countrywide Financial (CFC) -53.1%

IndyMac Bancorp (IMB) -50.8%

E*Trade Financial(ETFC) -41.4%

Popular Inc(BPOP) -37.4% (owner of E-Loan.com)

Bear Stearns Company (BSC) -33.5%

Lehman Bothers(LEH) -33.5%

H&R Block(HRB) -22.7%

Washington Mutual(WM) -20.4%

Intuit(INTU) -20.3% (owner of Quicken Loans)

Barclays PLC(BCS) -19.5%

Citigroup(C) -16.3%

Charles Schwab(SCHW) -14.9%

JP Morgan Chase(JPM) -14.8%

Companies with significant mortgage lending operations whose stocks have weathered the recent turmoil in better shape include:

Wells Fargo(WFC) -3.5%
Bank of America(BAC) -7.1%
American International Group(AIG) -8.9%

The worst news for investors in these stocks that the shaky loans made by many mortgage lenders will remain in their portfolios for years as ticking time bombs should economic conditions worsen. Besides the 15% of the mortgage market that is rated subprime, another estimated 20% to 25% is considered interest-rate sensitive and could be subject to increased delinquencies if interest rates increase.