Countrywide Layoffs Indicative of Mortgage Market Pain

September 10, 2007

Countrywide (CFC) projects a 25% decline in mortgage origination volume as the reason behind this dramatic employee layoff. Countrywide announced it will layoff 12,000 employees, or 20% of its work force, in the next three months to rebalance its origination capacity in a rapidly shrinking market. This announcement includes two recent layoff announcements of 500 and 900 employees respectively.

Is Countrywide's new origination forecast in the ballpark? Will total mortgage originations fall more than 25%? What does this significant layoff by the largest mortgage originator mean for the rest of the market? Who will be the winners and losers in this shakeout?

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