Countrywide Financial and Wells Fargo could be singing the blues in the next few quarters as news circulates that a higher number of owners have fallen behind on their mortgage payments. One case in point, California has seen a 67.2 % jump in default notices for the April-to-June quarter compared with the same time period a year ago, according to DataQuick, a California real estate research company. The increase is the largest rise in default notices since DataQuick began tracking foreclosures 14 years ago. Experts have pointed out that this jump in default notices could partly be attributed to those people who took out adjustable rate mortgages and now are having a hard time making higher payments because of the rise in the federal funds rate. While not feeling the pain yet, Wells Fargo could be aching considering it purchased the rights to service about $140 billion in mortgages from Washington Mutual on July 19. Countrywide Financial, the country's largest mortgage company, could be exposed to a higher proportion of risk as well.— Gerald Magpily
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