Posted on 05/14/2007 10:16:28 AM PDT by Moonman62
NEW YORK (Reuters) - Countrywide Financial Corp. (NYSE:CFC - News), the largest U.S. mortgage lender, plans to add 2,000 sales jobs this year as a housing slowdown batters weaker rivals, Chief Executive Angelo Mozilo said on Monday.
The Calabasas, California-based company is also rolling out new products such as reverse mortgages and 50-year subprime loans to pick up market share, Mozilo said at a UBS financial services conference.
"The market is undergoing very turbulent times," Mozilo said. "Our competition continues to consolidate, and consolidate rapidly."
Countrywide makes more than one-sixth of U.S. home loans, slightly ahead of San Francisco's Wells Fargo & Co. (NYSE:WFC - News). Most Countrywide loans are higher-quality, though it also makes subprime loans to people with weaker credit histories.
Mozilo estimated that more than 30 subprime lenders have exited the industry this year, battered by poor lending standards, rising defaults and investor unwillingness to buy many loans on the secondary market.
Accredited Home Lenders Holding Co. (NasdaqGS:LEND - News), a San Diego subprime lender, on Friday said it cut 1,300 jobs, or 31 percent of its staff, in the first quarter.
Other lenders to cut subprime jobs this year are Wells Fargo, New Century Financial Corp. (Other OTC:NEWC.PK - News), NovaStar Financial Inc. (NYSE:NFI - News) and General Electric Co.'s (NYSE:GE - News) WMC Mortgage Corp. unit, among others.
Countrywide said it ended March with a 16,920-person loan sales force, up 9 percent from 15,472 a year earlier, and 996 branches, up 11 percent from 895. Employment companywide was 57,682 as of April 30, up from 54,655 at year end.
NEW PRODUCTS
Countrywide hasn't been spared from industry turmoil.
First-quarter profit fell 37 percent to $434 million, largely because of its subprime exposure.
Mozilo said Countrywide has tightened its own standards, and now requires full documentation of income and assets for subprime borrowers. Subprime loans may total just 4 percent to 6 percent of loans this quarter, versus 8 percent a year ago.
Nonetheless, Countrywide plans by the third quarter to finish rolling out 50-year subprime loans nationally, though Mozilo said "(we) will not be putting these products in our bank's portfolio."
Countrywide also began late last year offering reverse mortgages, and said it has funded more than $50 million.
The product is a kind of home equity loan that lets Americans 62 and older borrow against equity in their homes and convert it to cash. Loans typically need not be repaid during homeowners' lifetimes. Some analysts expect the product to grow more popular as baby boomers age.
Reverse mortgage providers include IndyMac Bancorp Inc. (NYSE:IMB - News); EverBank Financial Corp.'s BNY Mortgage Co.; Seattle Mortgage Co., which is being bought by Bank of America Corp. (NYSE:BAC - News); and Wells Fargo.
In midday trading, Countrywide shares fell 96 cents to $40.12 on the New York Stock Exchange. They began the year at $42.45.
Wow, 50 year subprime loan - it's gotta be like paying rent!
Not to mention taxes!
Yes, you would have to be a complete moron to take one of these loans out.
The way things are going, it looks to me like taking out a loan, even a sensible one, to buy a home is insane. Add to your mortgage the property taxes (which is just paying rent to the government) and maintenance, and hell, it just ain’t worth it, even on the money I make.
Reverse mortgages are horrible things, too. They should be banned.
“Yes, you would have to be a complete moron to take one of these loans out”
Oh I dunno, a half wit my take the plunge : )
It’s an entry loan. The whole point is to refinance as soon as one is able. It’s probably safer than the variable rate loans of the past.
Better to wait, save up for a large down, and improve your credit.
One good thing for Countrywide, is that with all teh subprime lenders that haved gone bust they should be able to find enough mortgage sales droids.
Either that or they're betting that the situation gets so bad that they'll all be bailed out by the government (taxpayers) at some point and they'll get a free house.
That’s for sure!
Why do you say that?
Just make suer they get the right socre on the ethics test (if the test says they have ethics they failed).
That’s probably true for most people, but not everybody. Sometimes people get the opportunity to buy a housee that won’t be there in a few years.
The way the market is in many parts of the country the houses will be cheaper in the next 6 months to a year.
LOL!
LOL!
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