Industry News

Countrywide plans to lay off up to 12,000 workers

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Countrywide Financial Corp. confirmed rumors Friday that it plans to make drastic cutbacks in its workforce, with an announcement after the close of financial markets that 10,000 to 12,000 layoffs are planned in coming months. The layoffs -- which could total up to 20 percent of the company's workforce -- are to take place over the next three months, but might be scaled back if the environment for mortgage lending improves, the company said. Based on current interest rates, Countrywide said it expects loan-origination volume to decline by 25 percent in 2008 compared to this year. Countrywide, like other mortgage lenders that depended on Wall Street investors to buy the loans it originated, has had trouble funding loans in recent weeks as investors have become concerned about the rise in delinquencies and foreclosures in markets where home prices are falling or stagnant. After drawing down an $11.5 billion line of credit with 40 banks in August, Countrywide announced it had given Bank o...