Countrywide Mortgage Originations Halved, Subprime Loans All But Eliminated

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 |  About: Countrywide Financial Corp. (CFC)
by: Y.B. Fishel

Countrywide Financial Corp. said Tuesday its October mortgage loan volume fell 48% from a year earlier, and that its credit quality has begun to stabilize. Countrywide originated $21.96 billion in mortgages in October, down 48% from the $41.9 billion it originated in October 2006. The nearly $22 billion in mortgage originations marked a 4% M/M increase. The nation's largest private mortgage lender has all but eliminated subprime mortgages from its loan menu. Countrywide originated just $42 million in subprime mortgages in October, versus $3.25 billion in subprime loans a year ago, a 99% decrease. The company is also significantly curtailing its origination of home-equity products, with the $1.36 billion originated in October marking a 68% Y/Y decline. On the employment front, Countrywide ended October with 52,775 employees, down 2,077 from September and 8,092 from August. It plans to eliminate up to 12,000 jobs by December as it focuses on making smaller, safer loans. Countrywide's October data "continues to reflect the poor operating conditions in the origination markets but also contained a welcome flattening in foreclosures and reflected continue slow servicing payments," wrote analysts at Fox-Pitt Kelton in a research note, adding "Credit-quality trends showed hopeful signs of stabilization."

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