*Note: the bulk of this article was written by a Charlottesville loan officer. I added my two cents here and there and debated italicizing my comments/editing, but felt that that would have detracted too much from the readability.
What will Countrywide’s laying off of 12,000 employees mean for the Charlottesville real estate and loan market?
According to a Charlottesville area loan officer who spoke with a Countrywide employee, he said they are hiring Loan officers left and right, which theoretically means that they are firing back office, processors and underwriters (Read: slower underwriting turn times).Â Loan Officers work on commission, so they hire as many as they can and if someone can’t produce, it doesn’t hurt their bottom line (though in reality they do – in benefits, by costing management time and effort and hurting morale in the office – very similar to the aging “fill-a-desk mode that has driven the real estate model for so long).Â The idea that the 2008 market will be 25% lower than a frustrating 2007 for Countrywide is telling.Â The employee also told me that they are still “selling” Pay option arms, that start at teaser rates, feature neg am, and are a complicated, sophisticated product that *maybe* 1% of all borrowers could handle. He, in fact, likes the product. Sigh.
Combined with the “brokers aren’t someone you want to provide you a loan”; that you “should use someone who loans their own money” leads me to believe that the employees are being fed a bunch of crap from management.Â Expect Countrywide’s 3rd quarter earnings to be putrid.Â With Bank of America’s current 16% investment, perhaps they go for the whole ball of wax when Countrywide’s stock price dives after release in October.Â Bank of America desperately wants to climb into the top 3 in originations – this is their path.
Yesterday, I received a referral from a Realtor whom I respect.Â This is the first referral I have received from him/her.Â I don’t push, just try to show why I am a competent Loan Officer for them to work with.Â Countrywide is his preferred lender, but he made negative comments to the client about Countrywide, and then referred me.Â My point is that Realtors, especially those who follow the economy can see through their smoke and mirrors.
So, I have two issues:Â One – there are very good Loan Officers at Countrywide that we’d love to pick up in our shop, but only a few – we don’t hire if you have a pulse.Â Two – don’t bad mouth the competition, we are all part of this community and work hard for our Realtors and clients.Â Win the business because of your strengths, not by slandering others.
I hope you don’t think I’m bad-mouthing them myself.Â My issue is that the corporate culture there is caustic and it infects the Loan Officers.Â “Hey, we are Countrywide, and you are not.”Â Well, guess what, “I’m not Countrywide, and I’m glad about that.”
The market will be the decider when it comes to who lives and dies, maybe the smaller regional banks with lower overheads will become the winners over the long haul, it will be interesting to see it play out but for sure we don’t need all the players on the field today.
Very sorry for the many families who will be affected by this economic down cycle not only citizens facing job loss but also the many homeowners facing dificult choices, all this is going to extract a terrible price to our social and economic well being.
More at Bigger Pockets.