Countrywide Officially Surpasses $1 Trillion Mark

For years, it seemed likely that someday, some firm would someday grow a mortgage servicing portfolio to $1 trillion.

But until recent months, few expected it to happen this year. Now, Countrywide Financial Corp., the nation's largest originator and servicer of home loans, has reached that milestone. Countrywide reported servicing a home loan portfolio with a principal balance $1,020,416,000,000 at the end of August. That's more than seven million home loans.

But the company didn't get there by organic growth alone. While Countrywide has long prided itself on growing its business internally while many rivals turned to the merger and acquisition market for growth, Countrywide has been an active buyer of mortgage servicing rights this year.

Through the first eight months of the year, Countrywide reported purchasing servicing rights on "bulk" portfolios totaling $43.2 billion.

Countrywide said that at the end of August, its home loan receivables under management had surpassed $1 trillion, an increase of $255 billion, or 33%, from 12 months earlier.

Mind you, a $255 billion mortgage servicing portfolio in itself is enough to earn classification as a "mega-servicer." Now, Countrywide has grown by that much in just one year.

"Being the first servicer to reach $1 trillion in loans serviced is one of the great milestones in Countrywide's history," said president and chief operating officer Stanford Kurland, in a company news release.

And the company isn't done growing. Mortgage loan fundings totaled $53 billion in August, a new record for the company and a 71% increase from August of 2004. Home purchase lending, as opposed to refinancing, accounted for a record $25 billion of the total.

In the first eight months of this year, Countrywide funded $148 billion of home purchase loans.

While the $1 trillion milestone probably consolidates Countrywide's lead against competitors in terms of servicing market share, it is entirely possible that Countrywide will have company in the not too distant future. Wells Fargo, the nation's second-largest servicer of home loans, reported servicing $906 billion of home loans as of June 30.

Countrywide's $1 trillion does not include servicing volume handled by Countrywide's international affiliate, Global Home Loans. The U.K.-based subservicer and mortgage processor manages $109 billion of home loans.

Countrywide said the delinquency rate on its U.S. mortgage servicing portfolio was 3.68%, up from $3.57% a year earlier.

SNAPSHOT: Countrywide's Mortgage Servicing Rights

Dollar Volume $1 Trillion

Number of Loans 7 million

Year-Over-Year Growth 33%

Delinquency Rate 3.68%

Source: Countrywide Financial Corp.

Note: Data as of Aug. 31.

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