Countrywide Slashes Jobs

The company says up to 12,000 workers could be let go.
Author:
Publish date:

Updated from 5:48 p.m. EDT

Countrywide

(CFC)

, the lender laid low by the troubles in the mortgage market, is prepared to slash up to 20% of its work force.

The California-based mortgage banker said Friday afternoon that it could shed 10,000 to 12,000 workers in the next three months. The eliminations will occur "in areas most impacted by lower mortgage market origination volumes," the company said.

Already, jobs have been cut in divisions dealing with subprime and broker-originated loans. Countrywide said in a press release that the actual reductions might be lower if the interest rate environment and market volume outlook improve.

For the moment, Countrywide expects that total market origination volumes will decline approximately 25% next year compared with 2007.

Mortgage firms such as Countrywide and

IndyMac

(IMB)

have been forced to slash jobs because they are doing far less business than they did in the go-go days of the housing boom.

As well, Countrywide has suffered mightily amid increasing defaults and dicey loans provided to borrowers with unsavory credit.

The inability to offload these mortgages to buyers is compelling the lender to focus primarily on structuring conservative so-called conforming loans that agencies such as

Fannie Mae

(FNM)

and

Freddie Mac

(FRE)

will purchase.

Countrywide couldn't immediately be reached for further comment on its cuts.

Shares of Countrywide were little changed in extended trading after ending the regular session at $18.21.