Countrywide Adds to Servicing Portfolio.

Calabasas, CA -- Prior to announcing a planned acquisition by Bank of America, Countrywide's stock was in the tank, its origination volume is falling and Wall Street is worried about its ability to weather credit losses, but Countrywide Financial Corp. here continues to grow its mortgage servicing portfolio.

Countrywide reported in January that its servicing portfolio had grown to $1.48 trillion, putting it on track to possibly become the first lender to crack the $1.5 trillion mark. (Wells Fargo's servicing portfolio totaled $1.43 trillion as of Sept. 30.)

Countrywide has grown its servicing portfolio by $178 billion, or 15%, from the end of 2006 through the end of 2007, the company said. Countrywide now services more than 9 million home loans.

But credit issues continue to raise questions about Countrywide's potential to profit from the huge portfolio. Countrywide said the delinquency rate on its servicing portfolio was 7.2% of unpaid principal at the end of December, up rom 6.52% in November. A year earlier, the delinquency rate had stood at 4.6%. The foreclosure rate also increased sharply (see related story, page one).

The origination picture is more sobering. Countrywide's home loan funding volume in December was $24 billion, up 1% from November. The November funding volume was up 5% from the ...