August 21st, 2021 by MG
Yahoo reports on the layoffs:
Countrywide Financial Corp. has started laying off loan originators, according to a report in Monday’s Wall Street Journal, as the credit crunch continues to impact the nation’s largest mortgage lender.
The layoffs hit the company’s Full Spectrum unit, which handles “Alt-A” loans, which fall between the prime and subprime categories and often are for those applying for loans that don’t document their income.
The number of employees laid off was not disclosed. Full Spectrum employed a sales force of about 6,800, with Countrywide as a whole sporting a loan-origination sales force of about 18,000.
The layoffs come shortly after Countrywide bought five loan origination branches from HomeBanc Corp., then later tapped its credit line of more than $11 billion to increase liquidity.
According to the report, Calabasas, Calif.-based Countrywide is cutting back on lending and costs because the company will not be able to sell off risky loans, due to rising concerns in the mortgage industry.
And this is something mortgage folks are confirming as well. As Morgan Brown points out: “I can personally confirm it as well. Several of our friends have reported that sales team managers are being demoted and loan originators that are not performing near the top of the pile are either out the door or sweating in their seats.”
“In addition I’ve heard of layoffs in their Specialty Lending Wholesale division which is their subprime wholesale channel. Wholesale is where they fund loans brokered to them through smaller mortgage brokerages across the country.
This should come as no surprise to any one that is paying any attention. Countrywide, while a diversified business in many respects, is primarily a mortgage seller. If there is not a market for their loans then there is no money and efficiencies must be found. While they publicly state their goal is growth and market share - taking more of a shrinking market will still necessitate staff reductions.”
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