If countrywide goes into bankruptcy

[temeculaguy]

Can you blame him for eyeing some of the troubled companies, he isn’t called the oracle because he got lucky once, there is money to be made in a downturn. It seems almost logical that buying a motgage company or a builder while it is cheap and everyone else is running away, change the business model, learn from the mistakes and emerge on the other side of the cycle. There is a reason thousands of people trust their money to Buffet and people watch his moves, nobody watches my moves for good reason.

I have to second what bob said about Wells Fargo, not sure about B of A but if a bunch of lenders go under, eventually the survivors will pick up market share. Things don’t go up forever and they won’t go down forever, it’s a little dicey right now because the smoke isn’t anywhere near settling but when it does, there will still be banks.

[bsrsharma]

Countrywide plans to slash up to 12,000 jobs
The mortgage lender also says loan originations will be 25% lower in 2008.

September 7 2007: 5:51 PM EDT

NEW YORK (CNNMoney.com) — Troubled subprime mortgage lender Countrywide Financial Corp. plans to slash as many as 12,000 jobs over the next three months, according to company statement released late Friday.

Countrywide (down $0.27 to $18.21, Charts, Fortune 500) also expects that its loan originations in 2008 will be about 25% lower than this year.

The company says it’s shifting its focus to relatively conservative loans. These would be held as long-term investments in its savings bank unit or sold to Fannie Mae or Freddie Mac, government sponsored entities. Countrywide is also seeking loan insurance from the Federal Housing Administration.

Countrywide cut 500 jobs in August and another 900 jobs Wednesday, mostly from its mortgage production divisions. The company says the new round of cuts may be smaller than expected if the market improves, according to the release

http://money.cnn.com/2007/09/07/real_estate/countrywide_cuts/index.htm?cnn=yes

[bsrsharma]

Press Release Source: Countrywide Financial Corporation

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.”

[one_muggle]

I have to second what bob said about Wells Fargo, not sure about B of A

BofA is nearly twice the size (by market cap~$200B) of WF, and both are enormous companies–more than an order of magnitude bigger than is countrywide, and none of these companies is as small and overextended as are the hedge funds or brokerages.
I’ll go out on a limb and say that if either closes up shop, I’ll eat my keyboard. (of course, if things get that bad, I may just have to anyway)

-one muggle

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