Countrywide’s See-Saw: Employee Base Up 1,159 as Shares Plummet 13%

When the Dow closed below 13,000 Wednesday afternoon, amid bad housing news and a surge in the price of oil, Countrywide Financial’s new workers were all paying attention.

In July, the country’s number-one mortgage company hired 1,159 new workers, for a total of 61,586 workers. This includes new hires as well as workers absorbed through the closings of smaller lending companies.

For example, earlier this month Countrywide announced that, as part of an acquisition of certain assets of HomeBanc Corp.’s retail mortgage operations, including five retail branches, it would hire a significant number of HomeBanc’s retail loan originators.

At the time of the announcement, HomeBanc CEO Kevin Race noted in a company press release that this move was strengthened by Countrywide’s “reputation, resources, and capability to provide a stable platform for our associates who join their team.”

In less than a month, that stability has certainly been rocked to the core.

Stocks tumbled because investors were jittery over problems at lenders’ abilities to raise cash to secure short-term funds. Shares of Countrywide, the biggest U.S. home lender, fell $3.17 in afternoon trading Wednesday, or 13%, to $21.19.

This followed Countrywide’s release of Q2 operational data, which showed that it made 14% fewer home loans in July, which reflects its tighter lending guidelines that have significantly curtailed total production. In addition, the company says average daily application volume for the month was $2.7 billion, falling 15% to a nine-month low.

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The Calabasas, California-based company did, however, note that mortgage funding volume of $39 billion represents a 6% increase from last July, despite a smaller total origination market. The mortgage loan pipeline of $62 billion remained constant compared to a year ago.

A Countrywide spokesman this week told the Los Angeles Times that layoffs are now possible.

The housing market continues to look dismal, as the National Association of Home Builders housing market index sank for the sixth straight month; this month was the lowest reading since January 1991.

In fact, Countrywide CEO Angelo Mozilo has publicly lamented the status of the U.S. housing market, calling it a “huge battleship” that might not turn around before 2009. He predicts Countrywide will be one of five major mortgage lenders to survive this real-estate meltdown.

Elaine Rigoli has nearly 15 years of experience managing content and community for various B2B and consumer websites. Elaine has written thousands of business and technology articles and has been quoted in The Wall Street Journal and eWeek, among other publications.


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