Billionaire investor Warren Buffett may buy parts of beleaguered mortgage lender Countrywide Financial (CFC, news, msgs), some investors are speculating, according to The Wall Street Journal.
Countrywide’s debt-servicing business and its portfolio of mortgages and mortgage-backed securities may be attractive to Buffett, the Journal reported on its Web site Monday, citing unnamed investors.
Like many mortgage lenders, Countrywide has struggled with rising delinquencies and foreclosures, and an unwillingness among bankers to extend credit and among investors to buy the loans it makes.
Countrywide, which is being closely monitored by regulators, sought to reassure investors on Monday that it is safe to do business with the company.
Real investment opportunities
Buffett has been increasing his stake in financial-services companies, including those with significant exposure to the mortgage market.Earlier this month, Buffett’s investment company, Berkshire Hathaway (BRK.A, news, msgs), disclosed in a regulatory filing that it had made an investment in Bank of America (BAC, news, msgs), one of the six largest U.S. mortgage lenders.
Berkshire has long been a shareholder in Wells Fargo (WFC, news, msgs), the second-largest U.S. mortgage lender after Countrywide.
Wells Fargo has largely been spared the subprime-mortgage-related woes afflicting smaller rivals, helped by its conservative underwriting standards.
Buffett told CNBC last week that the worsening credit and housing markets may present him with some real investment opportunities.
Berkshire officials were not immediately available for comment. Buffett does not discuss what Berkshire is currently buying and selling.
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