Countrywide to Beef Up Sales Ranks as Rivals Falter
Countrywide Financial, 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, Calif.-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 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. 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, a San Diego subprime lender, on Friday said it cut 1,300 jobs, or 31% of its staff, in the first quarter.
Other lenders to cut subprime jobs this year are Wells Fargo, New Century Financial, NovaStar Financial and General Electric's WMC Mortgage unit, among others.
Countrywide said it ended March with a 16,920-person loan sales force, up 9% from 15,472 a year earlier, and 996 branches, up 11% from 895. Employment companywide was 57,682 as of April 30, up from 54,655 at year end.
Countrywide hasn't been spared from industry turmoil.
First-quarter profit fell 37% 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% to 6% of loans this quarter, versus 8% 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; EverBank Financial's BNY Mortgage; Seattle Mortgage, which is being bought by Bank of America; and Wells Fargo.
Countrywide shares fell 2% to $40.12 on the New York Stock Exchange.