Declining mortgage volumes will continue to drive consolidation in the home lending industry, a top Countrywide executive said Tuesday, according to media reports.
Countrywide Financial Corp.’s President and Chief Operating Officer Stanford L. Kurland, said the industry will continue to consolidate, adding that the largest U.S. mortgage lender plans to keep growing internally, reports said.
“We plan to continue our organic growth,” Kurland said at a financial services conference sponsored by UBS AG (UBS) in New York, MarketWatch reported.
Kurland said his Calabasas, Calif.-based company aims to strengthen its leading position in financing home purchases and servicing those loans with more product choices and enhanced customer services, according to reports.
The remarks came after some recent merger-and-acquisition deals involving mortgage lenders raised questions about other potential takeover targets, reports said.
Acquisitions in the mortgage industry have taken the spotlight this month. On May 7, Wachovia Corp. announced that it is acquiring Golden West Financial Corp., gaining mortgage lending operations under the World Savings Bank name in 39 states.
Aames Investment Corp., a national subprime mortgage lender based in California, is in discussions with several parties regarding a potential merger or sale of the company, the company said last week.
Also, it has been rumored that troubled Ameriquest, whose parent company this month announced plans to close 229 branch offices and lay off 3,800 employees nationwide, may be acquired. Ameriquest has not confirmed these rumors in any way.
Such deals have prompted many analysts and investors to predict further consolidation in the industry in the new, more challenging environment, with rising short-term interest rates dampening consumer demand for home loans. The Mortgage Bankers Association expects mortgage originations to fall by 18.6 percent in 2006.
Countrywide is among the big lenders mentioned by analysts as potential acquisition targets. But some industry observers don’t think that big originators such as Countrywide are likely to sell. In addition, they expect only a small handful of banks could afford to buy or merge with lenders such as Countrywide, reports said.