Countrywide Reassures Again, Says Job Cuts a Bit Higher

November 27, 2007 No Comments »

Countrywide Financial, the top U.S. mortgage lender, once again tried to reassure investors that the company was financially sound Tuesday.

“We said it back in August, we said it in September, we said it last week, we’ll say it until we turn blue in the face, but we have ample liquidity to fund our growth and operational needs,” David Bigelow, managing director of investor relations, said at an FBR Capital Markets conference in New York.

The statement followed a Wall Street Journal report that revealed Countrywide had borrowed a whopping $51.1 billion from the Federal Home Loan Bank in Atlanta as of the end of the third quarter.

The substantial borrowing led Senator Schumer to remark that Countrywide was using the FHLB system “like its personal ATM,” saying the mortgage lender’s deteriorating loan portfolio “poses an unreasonable risk.”

But Bigelow rejected scrutiny from Schumer, who yesterday ordered a probe into the Federal Home Loan Bank’s lending to Countrywide, and also brushed aside concerns that capital issues at Fannie and Freddie would limit its ability to make loans.

“We are very familiar with FHLB collateral requirements, and we are in full compliance…The FHLB has some experience in risk management, and they probably have some idea what they’re doing in terms of their lending activities,” Bigelow said.

Bigelow added that, “Countrywide does not believe that Freddie Mac’s third-quarter loss or any other recent news from the GSEs will have a material impact.”

He also mentioned that Countrywide still plans to cut the previously announced 10,000 to 12,000 jobs, but noted that the number could be “a bit higher”.

Check out the latest list of mortgage layoffs, closures and mergers.

In related news, the Mexican American Political Association is holding a protest outside a Countrywide branch in Santa Ana, California today at 4:30 pm.

Shares of Countrywide were up 23 cents, or 2.66%, to $8.87 in afternoon trading on Wall Street.

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