Mortgage lender Countrywide begins lay-offs: report
NEW YORK (Reuters) - Countrywide Financial Corp, which is trimming costs amid turbulent credit markets, began laying off staff involved in originating loans, according to a report on Monday in the Wall Street Journal's online edition, citing an internal e-mail.
The job cuts occurred in the company's Full Spectrum lending unit, according to the Journal, which handles many home mortgages known as "Alt-A", or loans rated between prime and subprime and generally given to borrowers who do not provide documentation of income.
The subject of the e-mail, which the Journal said was sent on Friday by one of the unit's senior officials, was lay-offs made that day but did not disclose the number of jobs being eliminated.
The company could not immediately be reached for comment.
Countrywide, the largest U.S. mortgage lender, employed a total of 54,655 staff at the end of 2006. It added close to 7,000 jobs between January and July, according to Chief Executive Angelo Mozilo last month, who said the company expected to add market share as weaker rivals fell away.
As of June 30, Full Spectrum's sales force numbered 6,785, according to a filing with the U.S. Securities and Exchange Commission, accounting for more than a third of Countrywide's roughly 18,100 loan origination staff.
The lender is expected to slash costs as it becomes more difficult to sell higher-risk mortgages, according to the Journal.
Countrywide last week drew down an entire $11.5 billion bank credit line as a global credit crisis limited its access to short-term cash.
The lender also said it had tightened its lending standards so most new home loans will qualify for purchase and guarantee by mortgage companies Fannie Mae and Freddie Mac. Such loans are, in contrast to Alt-A and subprime mortgages, considered among the least likely to default.
Countrywide's shares gained 13 percent on Friday closing at $21.43 on the New York Stock Exchange, after a day earlier falling as low as $18.95 a share, the stock's lowest level since 2003.
