Countrywide Begins Staff Layoffs

[mountainvue]

Source: The Wall Street Journal Online

Countrywide Financial Corp., reducing costs as part of its effort to weather a credit crunch, has begun laying off employees involved in originating loans, according to an internal email.

The layoffs occurred in the company's Full Spectrum Lending unit, which handles many home mortgages in a category known as Alt-A, or mortgages between prime and subprime that often involve borrowers who don't document their income. Such borrowers typically don't qualify for a conforming mortgage, the type that can be sold to government-sponsored mortgage investors Fannie Mae and Freddie Mac.

The email, sent to employees Friday by a senior official of Full Spectrum, discussed layoffs made that day but didn't specify the number. The company as a whole employs about 61,000 people. It had a sales force of about 6,800 in Full Spectrum out of a total loan-origination sales force of about 18,000 as of June 30, according to a Securities and Exchange Commission filing.

Less than two weeks ago, Countrywide said it was hiring more loan officers from rivals forced to close down. But the company now is expected to reduce sharply its lending and costs because investor anxiety over rising defaults has made it almost impossible for lenders to sell many types of loans now deemed too risky. That is likely to lead to a steep drop in earnings, at least in the short term, analysts say.



Read more: http://online.wsj.com/article/SB118758059074702618.html?mod=hps_us_whats_news

[no_hypocrisy]

1. Interestingly I got an e-mail from Countrywide this a.m., telling me how I'm

qualified for a mortgage (pure solicitation, i rent).

[AlCzervik]

2. my neighbor works for Countrywide, she ended with them after they bought the

company she worked for, she's sweating it.

[enid602]

3. snowball effect

I wonder how many of the 61,000 will be laid off, and how many of them will lose their homes due to foreclosure. Hopefully, if they were part of that bloodsucking operation, they were smart enough not to fall for their products.

[dipsydoodle]

5. Given that in many instances

granting the mortages was based on information containing lies and deceipt, aka obtaining goods or services by deception aka fraud, I can't believe they were likely to have provided mortagages for their own staff other than where they knew the application information to be on honest. Don't change the fact that sans a job paying the mortgage might prove to be difficult.

[sarcasmo]

14. I wonder just how big the snowball is going to get.

[Juneboarder]

15. Even if they lose their home to foreclosure...

You can live mortgage free for well over 6 months with the way the market is right now. I am a loan processor for Reverse Mortgages and my dad used to be a Real Estate agent here in CA. Due to business declines in real estate, my dad was unable to pay his mortgage starting in August of 2006. They were kicked out and foreclosed on in June, 2007... that's 10 months! Banks DO NOT want to foreclose and will draw the process out as long as they possibly can. If you're going down, you might as well take advantage of the situation...

[Skip Intro]

4. ACK! American Home Mortgage holds the mort. on my home, and Cwide on my mom's home (in my name).

Wonder what happens next???

[dipsydoodle]

6. Would just mean

that other companies will hold title to the charge against the property for now. Shouldn't otherwise affect you at all.

[slackmaster]

11. You have nothing to worry about as long as you keep your payments current

If your loan gets sold, you will be given plenty of notice where to start sending payments and when.

[bleedingheart]

7. Countrywide just built an office in our town about 1 year ago

I wonder if it will remain open?

[L0oniX]

8. I just paid off my mortgage from Countrywide and told them to go f*ck themselves!

[louis-t]

9. They need to put those who will be laid off to work

in the foreclosure dept. Maybe that will help speed up the process of selling off foreclosures. It is extremely aggravating to buyers and agents to wait 5 weeks to get an answer when an offer is made. Instead of laying off people to save money, they would do well to get people back in the homes they have foreclosed on. With winter approaching and lender reluctance to heat vacant homes, I look foreward to another year of showing moldy houses. With their foreclosure departments in Arizona and Texas, they seem oblivious to Michigan winters. The values of moldy houses drop far more than what they are saving on natural gas. Stupid, stupid, stupid. Sheeeesh!

[gratuitous]

10. But Dubya says our economy is the envy of the world!

Okay, it's the world of trollers and bottom feeders, looking to snap up overleveraged properties on the cheap for a quick turnaround, but it's still a world.

[ileus]

12. Maybe their rates for refi's will be good soon.

[mountainvue]

13. Another one bites the dust:

http://biz.yahoo.com/ap/070820/capital_one_financial_wholesale_mortgages.html?.v=1
Capital One to Shut Unit, Cut 1,900 Jobs

Capital One Financial Corp. said Monday it will cut 1,900 jobs and shutter its wholesale mortgage banking business, a move that comes as lenders continue to struggle in the nation's housing and mortgage markets.

Capital One said it will shut down GreenPoint Mortgage and eliminate most of the jobs by the end of year. The McLean, Va.-based company will close 31 GreenPoint locations in 19 states and "cease residential mortgage origination" effective immediately but said it will honor commitments to customers with locked rates who have loans already in the pipeline.

"Over the past few months, we have experienced an unprecedented disruption in the secondary mortgage markets," Capital One Chairman and Chief Executive Officer Richard D. Fairbank wrote in an internal memo to employees. "I made the decision to wind down the business with a heavy heart."

GreenPoint, based in Novato, Calif., specializes in no-documentation and Alt-A mortgage loans for borrowers with slightly better credit than subprime borrowers. In his memo, Fairbank said that market has seen a "significant reduction in liquidity and continuing volatility."