Someone told me that countrywide made a loan to her cousin – option ARM loan with stated income. And then she said – aren’t they supposed to be more conservative?

That’s precisely the point. If countrywide is so much more “solid” than sub-prime, and we know what type of loans they made, then we know what’s yet to come!

Countrywide was making as many or more toxic loans as the next guy. You need to take there CEO’s comments with a grain of salt. The truth is that they high graded all of the sub-prime loans they originated and held on to a very small % of the total loans originated. Keeping the best of the best in their own portfolio. The rest… the vast majority of sub-prime loans they originated were sold on wall street just like any other sub-prime lender would. The loans that they sold are not part of the 9% talked about in the article.