Countrywide Financial Corp funded 44.3 percent fewer mortgage loans in September as it eliminated nearly 5,000 jobs to cope with lower lending volume and increasing delinquencies and defaults, the company said on Thursday.
Mortgage loan fundings totaled $21.2 billion, down from $38.1 billion a year earlier. Fundings of adjustable-rate mortgages slid 76 percent, while nonprime loan fundings, including subprime, tumbled 92 percent. Countrywide Chief Operating Officer David Sambol said volume reflected current market conditions and more restrictive underwriting.
Delinquencies as a percentage of loans serviced rose to 5.87 percent in September from 5.05 percent in August and 4.50 percent in September 2006. Sambol attributed about half of the increase from August to there being four fewer business days in September.
The rate of pending foreclosures rose to 1.27 percent from 1.20 percent in August and 0.51 percent a year earlier.
The Calabasas, California-based company also said it ended September with 55,932 employees, down from 60,867 in August and about the same number as in March.
Countrywide is eliminating as many as 12,000 jobs, or 20 percent of its work force. It has overhauled its lending practices to focus on smaller, safer loans that mortgage companies Fannie Mae and Freddie Mac will buy.
The company's struggles come amid criticism of Chief Executive Angelo Mozilo's stock sales, which have resulted in well over $100 million of gains since they began late last year.
Countrywide shares have fallen 56 percent this year, closing Wednesday at $18.80. Most of Mozilo's stock sales were at much higher prices. According to The New York Times, North Carolina Treasurer Richard Moore on Oct. 8 wrote to U.S. Securities and Exchange Commission Chairman Christopher Cox questioning adjustments that Mozilo made to significantly increase his stock sales just as the subprime lending crisis was heating up.
Countrywide and Moore did not immediately return requests for comment.
(Reporting by Jonathan Stempel; additional reporting by Megan Davies)