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Countrywide Cuts Subprime Jobs

Countrywide Cuts Subprime Jobs

510 layoffs during past week

August 21, 2007


photo of Coco Salazar has confirmed that Countrywide Financial Corp. laid off more than 500 subprime employees last week.

Its Full Spectrum Lending division eliminated more than 400 jobs last week throughout branches and regional operations facilities across the country, Countrywide told in e-mail statements Monday.

Full Spectrum now forms part of Countrywide’s consumer markets division and originates prime, Alt-A and subprime. Historically, it was the subprime division of Countrywide Home Loans and engaged in Alt-A as well.

With Full Spectrum’s staff reduction, last week saw over 500 layoffs, including 110 in Denver, Colo., and Jericho, N.Y., from the closure of two regional operations centers of Countrywide’s wholesale subprime division.

“In recent months, the volume of subprime mortgage lending has contracted significantly across the industry,” Calabasas, Calif.-based Countrywide said in a written statement.

“When appropriate, Countrywide takes steps to adjust staffing levels, particularly in areas where the cost structure must align with production volumes,” the message continued.

The subprime share of fundings declined to 4 percent — or $5.7 billion — of overall second quarter production, falling from a nearly 7 percent share in the first three months of the year, according to operating data.

Toward the end of the first quarter, Countrywide laid off 108 wholesale subprime sales employees.

In May, however, the lender announced a plan to add 2,000 new sales jobs this year. An the lender recently told it is hiring approximately 200 former employees of American Home Mortgage Investment Corp., which has filed for bankruptcy protection.

Countrywide noted it continues to recruit and hire sales professionals in its pursuit of profitable market share growth.

“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,” Countrywide said Monday.

Countrywide said its current work force exceeds 60,000.

As of June 30, loan production workforce, which consists of sales, operations, and administration and support staff, was just shy of 33,800. Of this amount, 18,091 were loan sales employees, 6,785 belonging to Full Spectrum and 1,375 to the wholesale lending channel, according to a filing with the Securities and Exchange Commission.

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