Even as it recruits new sales staff from troubled competitors, Countywide Financial Corp. says it’s laying off some workers in divisions that handle loans the company is cutting back on.
Countrywide said it cut 500 positions last week in its Full Spectrum Lending division, which handles Alt-A loans, and the subprime lending unit of its wholesale lending division.
There’s been a significant contraction in the volume of subprime mortgage lending across the industry, Countrywide said in a statement released Monday.
“When appropriate, Countrywide takes steps to adjust staffing levels, particularly in areas where the cost structure must align with production volumes,” the statement said.
The statement came after the Wall Street Journal, citing an internal e-mail, reported Monday that Countrywide had laid off an unspecified number of employees in the Full Spectrum Lending division.
For several months, Countrywide has said it would pursue a growth strategy during the housing downturn in order to win market share from its competitors.
But Countrywide and other lenders have had difficulty in recent weeks obtaining short-term financing to fund loans and selling mortgage-backed securities to Wall Street investors.
The Calabasas, Calif.-based lender’s strategy during the liquidity crunch is to move funding of its mortgage loans from Countrywide Home Loans Inc. to Countrywide Bank by the end of September. Countrywide also says that 90 percent of the loans it originates will be eligible for repurchase by Fannie Mae and Freddie Mac, or consistent with its banking division’s investment criteria
In another memo to employees Thursday, company executives said the strategy to gain market share from competitors remained in place, and that Countrywide was in the process of hiring “several hundred loan officers” from competitors that have gone out of business.
Before the 500 layoffs announced Monday, total employment in loan originations at the end of July was up 6.4 percent, to 34,326, and total headcount at Countrywide increased by almost 10 percent, to 61,586.
The statement released by Countrywide Monday said the strategy to grow market share remains in place.
“Countrywide continues to recruit and hire sales professionals in its pursuit of profitable market share growth,” the statement said. “It also is carrying on with its strategic growth initiatives in its banking, insurance, capital markets and global endeavors. The success of our strategy to expand our retail and wholesale market share relies heavily on our ability to recruit and retain talented people as they become available during the industry’s consolidation.”