Countrywide to lay off 25% of workforce. Here's a game I like to play. When the CEO says that

[Mozilo] assured his audience that Countrywide's "proprietary technology" would help it meet its goal "to avoid any foreclosure." Countrywide invariably kept to "prudent underwriting guidelines," he said, to ensure that its adjustable-rate borrowers could handle the highest interest rates that might kick in during the life of their mortgage.

(Hat Tip LA Times)

It's time to short the stock. Their technology wasn't good enough to stave off the collapse off the credit market So they laid off 25% of their workforce. Oh yea they expect loan originations to be off by 25% this year. I am sure they are giving great RIF packages to those employees. Those that might remember I said the subprime market specifically in California would do EXACTLY THIS!

Labels: countrywide, countrywidelayoff, Countrywiderevenue, countrywiderif

  ¶ Countrywide to lay off 25% of workforce. 0 Comments

Countrywide misses revenue target A number of news organizations are posting this morning that Calabasas, California based mortgage provider Countrywide missed it's quarterly revenue targets. Most attribbute it to the fact that Countrywide didn't sell off as many loans in it's portfolio. Normally Countrywide would sell these mortgages on the secondary market. The sale of loans generates quick profits. Why didn't Countrywide sell as many loans?

"Sales of loans generate current-period gains on sale, while the retention of loans is designed to provide a more stable stream of net interest income,'' the company said. "In making the determination of whether to sell or retain loans, management considers .... earnings growth, current market and economic conditions."

In other word Countrywide is banking that the mortgage market is going to cool down and having a steady stream of income is worth morth than selling the loans on the secondary market.

Labels: countrywide, Countrywiderevenue

  ¶ Countrywide misses revenue target 0 Comments