Mortgage lender struggles; Valley impact unknown - East Valley Tribune: Business

Mortgage lender struggles; Valley impact unknown

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Posted: Saturday, September 8, 2007 5:02 am | Updated: 5:50 pm, Fri Oct 7, 2011.

Struggling lender Countrywide Financial Corp. said Friday it will cut as many as 12,000 jobs as it struggles to deal with challenging conditions in the mortgage industry.

The impact of the reduction on the company’s 2,350 employees in Chandler and Tempe are still unknown.

Rick Simon, company spokesman, said no specific numbers or locations for the expected layoffs are yet available.

“This (10,000 to 12,000 jobs) is an expected range for total reduction, based on what’s known today and dependent on many factors that can change,” he said.

When asked if or how many jobs in Chandler or Tempe would be effected, Simon replied: “We are not prepared to break out potential regional impacts.”

Countrywide’s Chandler campus occupies about 500,000 square feet on Chandler Boulevard east of Loop 101. The lender has a smaller facility in Tempe.

The company said the cuts, amounting to as much as 20 percent of its work force, are needed because it expects new mortgages to fall about 25 percent in 2008 from this year’s levels.

The job cuts are expected to center primarily on the company’s production divisions and its general and administrative support areas, Countrywide CEO Angelo Mozilo said in a letter distributed to employees Friday.

He also called the current market cycle “the most severe in the contemporary history of our industry.”

“During the past two years the growth in home price appreciation has stopped dead in its tracks and in many areas of the country it has turned in the wrong direction,” Mozilo said in the letter.

In recent weeks, the company borrowed $11.5 billion and sold a $2 billion stake to Bank of America so it could keep operating its retail banking and mortgage lending businesses.

The Calabasas-based company said it intends to keep transferring its residential lending business into its Countrywide Bank unit as a way to strengthen its access to funding.

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