Countrywide sees healthy market by 2009

BEVERLY HILLS, California (Reuters) - Countrywide Financial Corp. CFC.N Chief Executive Angelo Mozilo on Tuesday said he expects the U.S. mortgage market to show improvement in the middle of 2008, and to be "very healthy" for the largest U.S. mortgage lender in 2009.

Speaking at a Milken Institute conference, Mozilo also said 5 percent to 6 percent of the riskiest U.S. home loans may face foreclosure, though 19 percent of the company's so-called "subprime" loans have had missed payments.

Several dozen mortgage companies have been sold, gone out of business or gone bankrupt in recent months as payment problems on risky mortgage loans have jumped, lenders tightened their loan standards for borrowers, and housing values have stagnated or fallen.

Mozilo has long maintained that Calabasas, California-based Countrywide would survive an industry shakeout. He said the industry would begin "to see the light" in the middle of next year.

"By 2009, we're going to have a very healthy market from Countrywide's point of view," he said. "There will be very little competition in 2009 and 2010."

In its annual report, Countrywide said delinquencies, or late payments, rose to 19 percent of non-prime loans it services from 16.9 percent in the third quarter, and 15.2 percent at the end of 2005.

"Of the 19 percent, maybe 5 percent, will go into foreclosure, maybe," he said. He later clarified that "5, 6 percent, somewhere in there" of delinquent loans may go into foreclosure. "That means 94 percent won't," he said.

The Mortgage Bankers Association, a trade group, last month said the foreclosure rate nationwide set a record high in the fourth quarter.

Countrywide is scheduled to report first-quarter results on Thursday. Analysts on average expect it to report profit of 77 cents per share, down from $1.10 a year earlier, according to Reuters Estimates.

Countrywide shares rose 3 cents to $36.28 in afternoon trading on the New York Stock Exchange. They began the year at $42.45.