Countrywide Announces Plan to Address Changing Market Conditions Including Workforce Reductions
Friday September 7, 5:30 pm ET
CALABASAS, Calif., Sept. 7 /PRNewswire-FirstCall/ — Countrywide Financial Corporation (NYSE: CFC – News) today announced a plan of action to address changing market conditions that positions the Company for continued growth and success. Central elements of this plan include:
— Reductions in workforce which will occur in areas most impacted by
lower mortgage market origination volumes. The Company presently
estimates a total workforce reduction of 10,000 to 12,000 over the next
three months representing up to 20 percent of its current workforce.
Actual reductions could be lower should the interest rate environment
and related market volume outlook improve. Based on current interest
rate levels, Countrywide presently expects that total market
origination volumes will decline approximately 25 percent in 2008
compared to 2007 levels.
— Migration of the Company’s residential lending business into its
federally chartered thrift entity, Countrywide Bank, FSB, will
continue. This is expected to enhance and strengthen Countrywide’s
business model by delivering greater and more stable liquidity, reduced
borrowing costs and greater operational efficiencies. By September 30,
2007, the Company expects that almost all residential loan production
will be originated within the Bank.
— Product guideline revisions have been made to ensure that all loans
which the Company produces can be sold into the secondary market or are
high quality prime loans to be held in Countrywide Bank’s investment
portfolio. This includes the Company’s recent decision to no longer
originate any subprime loans other than those eligible for sale or
securitization under programs supported by Fannie Mae, Freddie Mac or
the FHA. In spite of these changes, it is important to emphasize that
Countrywide continues to offer among the broadest and most competitive
product menus in the industry.
— Growth plans will continue in areas of opportunity. Countrywide’s
retail and wholesale lending divisions plan to continue aggressively
pursuing the increased opportunities presenting themselves in the
current environment for profitable market share growth. Countrywide
Bank, in addition to housing the Company’s mortgage banking activities,
will also focus on growing its residential and commercial loan
investment portfolio and expanding its financial centers and deposit
franchise. Countrywide’s insurance segment will continue to grow both
its institutional and personal lines insurance businesses.
“We are taking decisive action to ensure that Countrywide continues to be well-positioned for further success,” said Angelo Mozilo, Chairman and Chief Executive Officer. “As we carry out our plan, the Company’s overarching focus is exactly where it has always been: to remain an industry leader in the U.S. residential lending business, to deliver value and world-class service to our customers and business partners, to enhance shareholder value, and to provide career opportunities for our people.”
“Each employee at Countrywide is considered an important member of the Countrywide family,” said David Sambol, President and Chief Operating Officer. “While workforce reductions are therefore always very difficult, these decisions are being made with the utmost attention and sensitivity to the impact they will have on our Company and our people.”
