Countrywide Financial Corp. said Thursday it had secured $12 billion in additional financing, even as loan fundings in August fell by 17 percent from a year ago and the company moves forward with plans to lay off up to 12,000 workers.

Countrywide, which received a $2 billion cash infusion from Bank of America in August after drawing down an $11.5 billion line of credit from 40 banks, said that since then it has arranged for $12 billion in additional secured borrowing capacity “through new or existing credit facilities.”

The Calabasas, Calif.-based lender’s stock was up nearly 8 percent shortly after noon on the news.

But the announcement came as Countrywide reported August loan fundings fell 17 percent from a year ago, to $34.3 billion, down from a recent peak of $45.3 billion in June. The 192,211 residential mortgage loans funded in August represented a 13 percent decline from July but surpassed a recent low hit in February, when 177,806 loans were funded.

In a Sept. 7 announcement of plans to lay off up to 20 percent of the company’s workers, Countrywide said it expected loan volume to decline by 25 percent in 2008.

Average daily mortgage loan applications in August were $2.3 billion, down 12 percent from July and August 2006. The mortgage loan pipeline was $52 billion at the end of August, compared with $64 billion at the same time last year.

Countrywide said it grew its mortgage loan servicing portfolio by 18 percent in the last 12 months, to $1.5 trillion.

The latest numbers show foreclosures pending as a percentage of unpaid principal balance continued to climb, hitting 1.2 percent at the end of August. That’s a 16-basis-point increase from July and more than double the 0.48 percent pending foreclosure rate of a year ago. Delinquencies as a percentage of unpaid principal balance were essentially flat at 4.9 percent compared to the previous month, but up from 3.65 percent a year ago.

As secondary market investors continue to shy away from securities backed by most nonprime mortgage loans, Countrywide said it was accelerating plans to migrate the funding of its mortgage originations to Countrywide Bank. The company said it has tightened product and underwriting guidelines so that all of the loans it originates are eligible for Fannie Mae, Freddie Mac or Ginnie Mae securitization programs, or meet Countrywide Bank’s investment criteria.

At $8.69 billion, August fundings of adjustable-rate mortgages were down from $11 billion in July and $19.3 billion a year ago. Subprime loan fundings totaled $1.27 billion, compared with $1.8 billion in July and $3.7 billion a year ago. At $2.2 billion, government fundings were down slightly from June and July, but nearly twice as great as the $1.61 billion tallied in August 2006.

Countrywide’s announcement of a possible 20 percent reduction in its workforce was preceded by smaller cuts, which showed up in the company’s August numbers.

Countrywide employed 33,658 workers in loan originations at the end of August, down 688 from a peak of 34,326 in July but up from 32,310 a year ago. Employment in loan servicing increased slightly, to 8,182, up 123 from the previous month, while the 1,984 workers employed in loan closing services represented a reduction of 45 positions from July. The company’s total workforce headcount stood at 60,867, down 719 from the previous month but up from 55,909 a year ago.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Success!
Thank you for subscribing to Morning Headlines.
Back to top