The reduction represents a fifth of Countrywide’s entire workforce and will take place over the next three months in areas of the company most impacted by lower volumes of business. The lender added that it expected its business volumes to decline by 25 per cent in 2008 compared to 2007 levels.
Countrywide said the redundancies could be lower than expected if the interest rate environment and financial markets improved. It also decided to ensure that all future loans could be sold to the secondary market or held in its own investment portfolio, while it will only originate non-conforming loans that could be sold or securitised.
Angelo Mozilo, chairman and chief executive officer of Countrywide, said: “We are taking decisive action to ensure that Countrywide continues to be well positioned for further success. As we carry out our plan, the company’s overarching focus is to remain an industry leader in the US residential lending business.”
James Cotton, mortgage specialist for London & Country, said: “The US problem is, of course, affecting the UK, but there is a big difference between being affected and dealing with the same effects. We are not seeing the same problems here as US, with such enormous interest rate increases and falling house prices. We have to put it into perspective and US lenders are having it much worse than UK lenders. We will see the knock-on effects, such as a fall in house price growth, but not the core problems.”
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