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As foreclosures double, Countrywide expands

Countrywide Financial Corp., the largest U.S. mortgage lender, on Tuesday said it made 15 percent more home loans in May as the pace of refinancings increased, though the foreclosure rate doubled.
/ Source: Reuters

Countrywide Financial Corp., the largest U.S. mortgage lender, on Tuesday said it made 15 percent more home loans in May as the pace of refinancings increased, though the foreclosure rate doubled.

The Calabasas, California-based company also said it added 1,329 jobs in the month, on top of 1,759 in April, giving it a total of 59,011 employees.

Countrywide has long said it expects to add market share as the U.S. housing slowdown and rising defaults cause weaker rivals to fold or reduce risk. It has boosted staffing 8 percent this year.

Mortgage lending totaled $44.42 billion in May, up from $38.73 billion a year earlier, though nonprime loans, including ”subprime,” sank 43 percent to $2.19 billion.

New home loans edged up 2 percent to $18.64 billion, while refinancings increased 26 percent to $25.78 billion. Countrywide said it ended May with $69.74 billion of loans in its pipeline, the most since October 2005.

“Origination volumes should hold up significantly better than the market, despite rising interest rates,” wrote Credit Suisse analyst Moshe Orenbuch. “Given Countrywide’s diverse product set, its production volumes are clearly benefiting, as consumers move back into more traditional products.” He rates Countrywide “overweight.”

Foreclosure rate doubles
Countrywide said pending foreclosures as a percentage of unpaid principal balances rose to 0.90 percent from 0.45 percent a year earlier, and 0.85 percent in April.

Foreclosures based on the number of loans serviced rose to 0.71 percent from 0.47 percent a year earlier, and 0.69 percent in April, Countrywide said. Delinquencies rose to 4.71 percent from April’s 4.45 percent.

The portfolio of loans that Countrywide services grew 18 percent to $1.39 trillion.

Countrywide plans to hold its annual shareholder meeting on Wednesday. The company opposes a proposal calling for it to give shareholders a non-binding vote on pay for top executives. Countrywide Chief Executive Angelo Mozilo received $42.98 million of compensation for 2006.

Countrywide shares rose 11 cents to $37.95 in morning trading on the New York Stock Exchange. Through Monday, they had fallen 11 percent this year, compared with a 4 percent drop for the KBW Mortgage Finance Index.