Specialist Gerard Petti (right) directs trading at his post on the floor of the New York Numbers Stock Exchange last Thursday morning. Stocks fell sharply after a move by Countrywide Financial Corp. confirmed fears of widening problems with some mortgages and tighter access to credit. - APLOS ANGELES:
The mortgage meltdown continued on Monday as Countrywide Financial Corp. said it eliminated about 500 jobs in its subprime lending unit, and a big issuer of 'jumbo' loans said it was shutting dow But one big lender - Washington Mutual Inc. - says it plans to expand its writing of mortgages that have become extremely unpopular with investors.
Countrywide, which retains a workforce of more than 60,000 people, gave no details about the job cuts at its Full Spectrum Lending unit, which handles subprime loans, those issued to people with poor credit. One person close to the company said that Countrywide was laying off 500 employees in Chandler., Arizona, where it has a major operations centre, and 50 underwriters in Los Angeles.
Closing greenpoint unit
Separately, Capital One said it would close its GreenPoint unit, which made jumbo loans - those for more than US$417,000 - and so-called 'alt-A' loans to home buyers who don't fully document their income or assets. The bank said it would close GreenPoint's 31 locations and eliminate 1,900 jobs immediately.
Washington Mutual, the nation's No. 3 mortgage lender, plans to step into the void created by companies such as Countrywide and GreenPoint that no longer can find buyers for subprime o loans or jumbo mortgages, which Fannie Mae and Freddie Mac aren't permitted to buy.
Because Washington Mutual has positioned itself to be able to keep more of these loans in its investment portfolio rather than sell them, it can ignore Wall Street's currently negative view of the mortgage market, Washington Mutual Chairman Kerry Killinger said.
Los Angeles Times-Washington Post News Service
