Countrywide Is First Servicer to Reach $1 Trillion

Countrywide Fina-ncial Corp. in April officially reached a milestone that no other lender has reached before when its mortgage servicing portfolio exceeded $900 billion.

But a deeper look at the numbers reveals another startling milestone: the company actually manages over $1 trillion of home loans when its international subservicing business is added to the mix.

At the end of April, Countrywide owned servicing rights on $914 billion of home loans, the company reported in its monthly operational data. That was an increase of 32% from one year earlier.

Countrywide now manages 6.6 million home loans domestically.

Countrywide also reported that its subservicing volume managed by its Global Home Loans subsidiary totaled $116 billion, meaning the company manages $1.03 trillion in home loans on a consolidated basis.

By almost any measure, the Countrywide growth story continues unabated, despite an industrywide slowdown in loan origination volume in the second half of last year. Mortgage origination volume declined 9% in the second half of 2004 compared to the first half, according to the Mortgage Bankers Association.

In the first four months of this year, Countrywide funded $126 billion of home loans, helping to fuel growth in the servicing portfolio. Nonprime lending accounted for $13 billion of Countrywide's year-to-date funding.

The company funded $34 billion in the month of April alone. Average daily application volume climbed to $2.6 billion, up 26% from April of 2004, suggesting that Countrywide's lending volume will stay strong through the spring.

In a company news release, president and COO Stanford Kurland noted that Countrywide reached milestones including the $900 billion servicing threshold and $56 billion in bank assets during April.

"The mortgage loan pipeline of $66 billion suggests continued strength in mortgage loan fundings for the near term."

And Countrywide chairman and CEO Angelo Mozilo continues to set ambitious goals for the company. In recent speeches, Mr. Mozilo said that as the mortgage industry matures, the industry's largest players will control an increasing share of the market.

And he expects Countrywide to lead the pack. By 2008, Mr. Mozilo believes his company will control 20% of the mortgage market.

In a New York speech to investors in March, Mr. Mozilo said that the dominant companies in mature industries almost always control between 25% and 35% of their market. He believes the mortgage industry is approaching the level of maturity where that will be the case in this industry as well.

At the end of 2004, Countrywide had an 11% market share in the U.S. home loan market, and that has continued to edge upward according to recent data collected by Mortgage Servicing News. At the end of the first quarter, Countrywide's servicing portfolio was 31% larger than it had been a year earlier.

And Mr. Mozilo has said the company expects that portfolio to become increasingly profitable as interest rates edge up, helping offset declining industry origination volume. He noted that Countrywide has continued to grow through a number of major refinancing booms and their aftermath over the course of the last few decades.

"These cycles take out the weaker players, which creates opportunities for a company like Countrywide," Mr. Mozilo told investors in New York.

(c) 2005 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com

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