Countrywide Financial Corp. said today it laid off nearly 5,000 workers in originations during September as mortgage loan fundings fell 44 percent from a year ago to $21 billion.

Delinquency rates on Countrywide’s $1.46 trillion servicing portfolio also jumped to 5.85 percent, although the company blamed about half of the 82-basis-point, one-month increase on the fact that September had four fewer business days than August.

The steep drop in September loan production helped drive loan production for the third quarter down 27 percent from the previous quarter and 19 percent year-over-year. Countrywide attributed the fall in production to market conditions and more restrictive underwriting.

The Calabasas, Calif.-based lender slashed subprime loan funding to $255 million in September, down from $1.3 billion in August and $3.1 billion a year ago. Government loan fundings were also down 25 percent compared to August, to $1.7 billion, and funding of adjustable-rate mortgages fell by more than half, to $3.8 billion.

After investors scaled back purchases of mortgage-backed securities and short-term commercial paper debt some mortgage lenders depend on to fund loans, Countrywide said it would lay off up to 12,000 workers, concentrate on loans eligible for purchase by Fannie Mae and Freddie Mac, and originate loans through its banking unit.

Countrywide President and Chief Operating Officer David Sambol said today that the company originated 89 percent of its loan production through the bank in September, compared with 31 percent a year ago.

The bank generated $2.7 billion in new deposits in September — an all-time monthly record — to help deposits excluding escrows reach $44 billion, Countrywide reported.

Countrywide’s mortgage loan servicing portfolio continued to grow, albeit at a slower pace, reaching $1.46 trillion at the end of the month, up 17 percent from a year ago.

The company reported that it reduced total head count by 4,935 positions between August and September, to 55,932. That’s still about 400 more workers than the company employed a year ago, but a 9 percent reduction from a July 2007 peak of 61,586.

Countrywide cut 4,573 positions in loan originations in one month, with 29,085 working in that field at the end of September. The head count in loan closing services was also scaled back to 1,858 positions, a reduction of 126 workers from the month before.

Countrywide added 101 workers in loan servicing, boosting employment in that field to 8,283, a 19 percent increase from the 6,959 workers employed in servicing a year ago.

Employment in banking rose to 2,406 employees at the end up the month, up 23 percent from the 1,952 employed in that field at the start of the year.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription