Countrywide May Fire as Many as 12000 as Mortgage Demand Wanes

Countrywide May Fire as Many as 12,000 as Mortgage Demand Wanes
By Elizabeth Hester and Jody Shenn

Sept. 8 (Bloomberg) -- Countrywide Financial Corp., the biggest U.S. mortgage company, plans to cut its workforce by 10,000 to 12,000 in the largest round of firings since the industry's contraction began last year. New U.S. home loans probably will drop 25 percent in 2008 from this year's levels, forcing the company to eliminate as much as 20 percent of its staff, Calabasas, California-based Countrywide said in a statement yesterday.

More than 15,000 jobs have been lost this week amid the worst U.S. housing slump in 16 years. IndyMac Bancorp, the second-biggest mortgage company, National City Corp. and Lehman Brothers Holdings Inc. cut staff. At least 100 mortgage companies have sought buyers or halted lending since the start of 2006, and foreclosures in the second quarter rose to a record, according to the Mortgage Bankers Association in Washington...

Angelo Mozilo, 68, the company's co-founder and chief executive officer, said in an interview he has ``no regrets'' about adding staff in recent years. ``We adjust to the environment we're in,'' he said. ``There was great opportunity for Countrywide to invest in a growing market.'' The company's stock fell 27 cents, or 1.5 percent, to $18.21 in Friday's New York Stock Exchange composite trading. Countrywide shares have lost 57 percent this year.

Mortgage lenders have run short on cash as home sales slowed, more borrowers paid late and investors avoided mortgage bonds that don't have implied government guarantees. That prompted banks, securities firms and commercial-paper markets that finance mortgage companies to shut off credit. Countrywide, which handled all types of mortgages, tapped $11.5 billion of emergency financing last month. A $2 billion investment from Bank of America Corp. on Aug. 22 helped ease concern that the lender might file for bankruptcy protection. ``It was impossible to anticipate the credit crisis we've seen on a worldwide basis,'' Mozilo said...

http://www.bloomberg.com/apps/news?pid=20601087&sid=ah7emxcVIod4&refer=home

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Yeah, it was impossible to anticipate brokers handing out zero-down, no-doc mortgages to anybody off the street with a pulse...

Yep ... and guess who was President THEN. :grr:

I think it is time more of the big corps start feeling the pain.

job losses, capital scarcity, reduced consumer demand for durable goods, high energy prices...

Hang on, we're in for a bumpy ride...