Posted at 11:36 a.m., Monday, August 20, 2007
Report: Countrywide has started to layoff workers
Associated PressLOS ANGELES (AP) Countrywide Financial Corp., the nation's largest mortgage lender, has begun laying off staff as part of its effort to ride out the credit crunch that has rocked the home loan industry, according to a report published Monday.
The job cuts occurred in Countrywide's Full Spectrum Lending unit, according to the Wall Street Journal, citing an internal e-mail sent Friday to employees of that division. Countrywide has several offices in Hawai'i.
The e-mail didn't disclose how many employees were laid off from that division, which handles many Alt-A mortgages, which are given to customers who either have minor credit problems or who cannot provide full income documentation required to get a traditional prime loan.
Last week, Countrywide, which as a whole employs about 61,000 people, was forced to borrow $11.5 billion so it could keep making home loans. It was a move that rattled investors who have watched a number of smaller mortgage companies go under because of credit problems.
Countrywide Financial spokesman Daniel Weidman did not immediately respond to a phone message left early Monday seeking comment.
Its shares rose 56 cents, or 2.6 percent, to $21.99 in premarket trading Monday after rising 13 percent on Friday. They have traded in a 52-week range of $15 to $45.26 over the past 52 weeks.
Countrywide is the largest mortgage lender by volume, accounting for more than 13 percent of the loan servicing market as of June 30, according to the mortgage industry publication Inside Mortgage Finance.
The mortgage lending industry has been grappling with a spike in mortgage defaults and foreclosures as the housing market has cooled.
Many homebuyers have been forced into default or foreclosure because they haven't been able to sell their homes or end up owing more than their home is worth.
A jump in subprime mortgage defaults earlier this year forced several lenders out of business and prompted industrywide tightening of lending standards involving higher risk borrowers.
Like other lenders, Countrywide, based in Calabasas, has also tightened its credit guidelines and stopped selling some types of adjustable rate loans.