Bad Credit Online Magazine - Daily News and Advice on Credit, Debt and Mortgage : Countrywide profit falls

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July 27, 2005

Countrywide profit falls

If this is any indication, it may mean a lot leaner times ahead for many mortgage bankers. Countrywide which is the largest mortgage lender in US, reported that quarterly earnings fell 28 percent. The reason is that loan origination and subsequent sale of the loans to investors decreased significantly. Countrywide profits from mortgage banking went down almost 50 percent.

Washington Post further reports a strong competition in the mortgage industry that forces much lower loan margins.

As real estate market remains strong, the mortgage industry is becoming more competitive. Every day small and very aggressive banks and lenders are entering the picture. Quite a few have very low overhead and can price their loans more aggressively getting a bit bigger chunk of the market every day. Some of them also operate in certain regions where they can have strong present catering to local mortgage brokers. So big mortgage banks like Washington Mutual, Countrywide, Wells Fargo and the rest sometimes have difficulties competing with them.

You can also see more and more mainstream banks entering sub prime market directly or thru acquisitions.

 
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Bad Credit Advisor online magazine provides daily news about credit, debt and mortgage. We aren't paid to mention specific deals or products. We cover what we think is interesting as industry professionals ourselves.

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