Countrywide announced that mortgage applications fell last month by a wide margin as fewer home buyers appear to be entering the market. This is bad news for existing homeowners and banks holding foreclosures since they are now either stuck with their homes or will be forced to lower prices further in order to attract interest. Meanwhile, many experts are predicting that the U.S. could see such trends through the end of 2009 and into 2010 as more and more people are expected to default on their home mortgages.

From Reuters:
Countrywide Financial Corp. (CFC.N: Quote, Profile, Research), the largest U.S. mortgage lender, said on Thursday that average daily loan applications for February totaled $1.9 billion, down from $2.6 billion in January. Countrywide lost $704 million in 2007, and according to a Feb. 13 regulatory filing the company believed it might have faced "financial distress" had it not agreed to the takeover.