Countrywide CEO: housing slump to last a year

Discussion in 'Wall St. News' started by S2007S, Nov 15, 2006.

  1. S2007S


    This guy sounds nervous:

    Countrywide CEO: housing slump to last a year
    No. 1 mortgage lender's exec says buyers must first believe home prices won't decline.
    November 14 2006: 1:30 PM EST

    NEW YORK (Reuters) -- The slowdown of the U.S. housing market will last through 2007 as inventories are pared enough to prompt a change in consumer psychology, the chief executive officer of the nation's biggest mortgage lender said Tuesday.

    Mortgage lending has slowed as rising inventories in the housing market led to a "hard landing" for the industry after a decade of strong growth, Countrywide Financial Corp. (down $0.30 to $39.97, Charts) CEO Angelo Mozilo said at a Merrill Lynch & Co. conference in New York.

    "We have another year of adjustment, or transition" in the industry until consumers believe home prices won't decline, Mozilo said. "Various events will make the change take place and one of them is" a decline in available homes, he said.

    Mozilo said he expects the industry will see lending volume grow progressively from 2008 to 2010 because of a build-up of demand. Until then, the industry will continue to consolidate and eliminate excess capacity.

    Calabasas, California-based Countrywide last week said it has funded $375 billion in residential mortgage loans in the year through October, down 7 percent from the same period of 2005. Its pipeline of mortgages that haven't yet closed totaled $61 billion in October, down 14 percent from a year earlier.

    Countrywide has also said it would trim more than $500 million of annual costs by year end, in part by firing more than 2,500 employees.