Countrywide misses revenue target

A number of news organizations are posting this morning that Calabasas, California based mortgage provider Countrywide missed it's quarterly revenue targets. Most attribbute it to the fact that Countrywide didn't sell off as many loans in it's portfolio. Normally Countrywide would sell these mortgages on the secondary market. The sale of loans generates quick profits. Why didn't Countrywide sell as many loans?

"Sales of loans generate current-period gains on sale, while the retention of loans is designed to provide a more stable stream of net interest income,'' the company said. "In making the determination of whether to sell or retain loans, management considers .... earnings growth, current market and economic conditions."

In other word Countrywide is banking that the mortgage market is going to cool down and having a steady stream of income is worth morth than selling the loans on the secondary market.