Killing Countrywide

<-------Scumbag, Angelo Mozilo


So, you know by now how much I like Countrywide. It's not a lot for those of you new to my blog. And I have again and again mentioned how surprised I have been that the company has not suffered from larger lay off numbers. Last month the company shed 500 jobs and Wednesday cut another 900. But this is/was a company of 60,000 employees. If Countrywide was going to originate mortgages to Fannie Mae and Freddie Mac guidelines, there just wasn't going to be enough work to go around. For all intents and purposes the company was going to basically cease doing all their sub-prime lending. This is/was the largest sub-prime lender in the country. How could they not be cutting more jobs, if they were changing the way the do business? The other shoe finally dropped today. The company announced it was laying off 12,000 workers.

Now, I'm not saying this makes me happy. As much as I dislike Countrywide's business model & CEO, it is sad to see a large employer announce reducing staff by over 20%. But if Countrywide wants to survive, it is what had to happen. It is amazing that it didn't happen sooner. The company was actually adding staff up until July when the wheels fell off and people started to wonder if the company would have to seek bankruptcy protection.

It is still to be seen as to what extent the company is really damaged. They reduced their own origination outlook for 2008 by 25% (which makes sense when you are cutting roughly the same percentage of staffing) but I think those estimates are still too rosy. I wouldn't be surprised if Countrywide drops originations by 40% next year. Most people seeking a mortgage, either for purchasing or refinancing, will likely seek out other lenders because of all the negative press Countrywide has received in the last few months. Impressions linger.

And you know what? I can't remember seeing one of those, "Nobody can do what Countrywide can," in a at least a week. If that commercial is dead. I would be happy.