US: Credit Market

Countrywide CEO Says Company 'Out' of Subprime


Countrywide Chief Executive Angelo Mozilo said Tuesday the largest U.S. mortgage lender is "out" of the subprime business, apart from offering home loans eligible for purchase by government-sponsored enterprises.

Angelo Mozilo

Countrywide substantially tightened lending standards after rising defaults, falling home prices and tighter credit markets made it harder for the company to borrow and make home loans.

Earlier this month, it said it would cut up to 12,000 jobs, or about 20 percent of its work force, by December. "We are out of the subprime business," Mozilo said at a Bank of America investment conference in San Francisco. "The only subprime loans that Countrywide will originate will be GSE-eligible, period."

Subprime loans go to people with weaker credit. Countrywide is based in Calabasas, Calif. Major GSEs include Fannie Mae and Freddie Mac .