Paul Tharp writes in the New York Post yesterday on the plight of Countrywide Home Loan stock price taking a beating while the CEO, Mr. Angelo Mozilo, cashes in stock options worth more than $118 million! Anytime the executives start cashing out, you know there’s trouble.

Ditech Mortgage owned by GMAC Mortgage, is famous for their schlocky TV ads with a fat loan officer who always loses clients (even his own mother in one) saying, “Lost another loan to Ditech”.

These same ads pummel the viewer with the misleading, but very enticing $395 Flat Fee idea.

Wells Fargo Mortgage is a subsidiary of a Federally chartered depositor bank which merged with Norwest Bank in 1998 an has become the second largest mortgage originator.

Wells Fargo Mortgage is part of the $40 Billion Wells Fargo Bank mega-company that once again has been a darling of stock brokers and mutual fund managers for over two decades. It is no accident Wells Fargo has had incredible stock price appreciation mainly due to their mortgage operation.

Lenox Financial Mortgage is known for their ever-present radio campaigns touting “no cost” refinancing and is the prime example of what I call “deceptive or incomplete” advertising.

Refer to my article, “No Closing Cost Mortgage Advertising Is a Lie” to see how Lenox Financial and others pull the wool over the eyes of the average mortgage consumer.

Mortgage stock prices are dropping like a stone creating a huge profit opportunity. I wrote a post 10 months ago on my ActiveRain blog showing folks how to “short” mortgage stocks to bank these profits.

Since then a most mortgage stock prices have literally freefallen. Right after that post, Novastar’s stock (symbol: NFI) dropped 40% in one day down to about $15 a share. Today Novastar has dropped even further down to $2.08 another 60%.

Countrywide Loans are the biggest mortgage lender and yet they are under serious scrutiny. Countrywide Loans are rumored to be under investigation on stock sales and on the verge of collapse.

Countrywide Loans are owned by parent company Countrywide Financial Corporation, a NYSE traded company under the symbol CFC. The mortgage division consisting of Countrywide Home Loans and Full Spectrum Lending, their subprime lending arm, which makes up to almost 70% of the revenue for the company.

This is another scamming retail mortgage provider: the new home builder mortgage company. These companies are subsidiary mortgage banks owned by the new home builder. They will never broker a loan.

Merrill Lynch yesterday downgraded the stock of Countrywide Home Loans (CFC ticker symbol) and speculated on the analyst call just how they could go bankrupt. First this was irresponsible and reckless on the part of Merrill…or was it?

Since the call yesterday a lot has happened:

1. The stock has fallen about 10 points.

I notice a disturbing trend in the media and on TV in general. I first talked about this on our podcast for last week. It seems like when you hear the word “mortgage” on TV it always means something bad.

When people get taken advantage of it is by a “mortgage company”.