The slowdown in the US housing market is leaving many of America's largest mortgage lenders to adapt new business plans. Many lenders are cutting costs and launching new risk reduction strategies in the face of a slowing market in the $9 trillion home mortgage industry. Slowing sales have pushed inventories of unsold homes up 39% in the past year. Many areas are seeing slower rates of home price appreciation, with a few reporting depreciation of home prices. Builders recently reported the lowest confidence in the past 14 years for the month of July. "I've never seen a soft-landing in 53 years, so we have a ways to go before this levels out," Countrywide CEO Angelo Mozilo said. Countrywide recently announced plans to cut costs. "I have prepared the company for the worst that can happen." Countrywide plans to cut as much as $500 million in costs over the next year, partly due to the slowing market. Ameriquest Mortgage Company, the nation's largest subprime lender, announced earlier in the year that it will cut over a third of its 11,000 employees. Washington Mutual is also in the process of cutting mortgage-related employees. Many lenders are tightening down, yet some are looking at this as an opportunity to expand. Many larger lenders are purchasing smaller mortgage companies. Others are exploring more lucrative mortgage products, such as payment-option ARMs. |
