The nation’s largest lender, Countrywide, tonight announced that in an effort to cut costs and essentially save the company, it would be cutting 12,000 jobs.
The cuts, amounting to as much as 20 percent of its work force, are needed because the company expects new mortgages to fall about 25 percent in 2008 from this year’s levels, Countrywide said.
In a letter distributed to employees, Countrywide Chief Executive Angelo Mozilo 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, Countrywide 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.
What say you now folks?
The R Word
Are we not in for some scary times to come?
I think this is going to lead us in one direction — R E C E S S I O N
That’s right . . . given everything going on with the business and economy, it looks RECESSION is coming soon to a country near you!
Never fear, though! If you can remain smart about how you invest (both in real estate and in equities), how you save, and mostly, how you spend, you can ride it out. Some of the best opportunities can be found in tough times, which means it’s time to start looking!
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Article Author: Joshua DorkinJoshua has written 568 articles for us.
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Joshua Dorkin (@jrdorkin, Google+) is the founder and CEO of BiggerPockets.Mr. Dorkin's vision for BiggerPockets has helped to propel it into becoming one of the top real estate destinations online. His vision for the site and its future has brought national press attention to both Mr. Dorkin and to BiggerPockets.
Joshua Dorkin
{ 8 comments… read them below or add one }
What a great time to live in Austin. Our job growth is still very strong and unemployment is very low. Home sales are slowing, but still pretty strong and prices are continuing to rise, but not at a scary high rate. I think we will survive the coming trouble pretty well, but I feel sorry for people in some markets that will be hard hit.
It is rather frightening to think about. Thanks for the post.
12,000 jobs! That is incredible. I don’t think anyone can doubt that we are headed for scary times.
Wow! This is very sad news for all the employes. However, everything will turnback around in a short amount of time.
The country went into a recession the last time a Bush was in office. People start throwing around the R word quite a bit lately. Hopefully its a case of being chicken little. Not all areas of the country have a bad housing market and rising unemployment. Our rate in Nevada is very low and construction is still booming.
well, sounds very scary to me. wonder what’s going to be next…
I hate to say it but I think Countrywide’s CEO needs a kick in the ass… He went from hiring everyone to two weeks later firing everyone! Not a good leader in my opinion. The man behind the machine needs to have a better pulse on the affairs of the company. -J in Vegas
It is a difficult time to be in the industry. But every industry will have its ups and downs. Save when the industry is up so that you wont feel the pain when it is down.
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