DENVER—Countrywide Financial Corp., the nation’s largest mortgage lender, laid off 60 employees who worked at the Denver Technology Center processing subprime mortgages—loans given to customers with poor credit history.
The move Wednesday came a day before Countrywide borrowed $11.5 billion from a group of 40 banks to help it make more loans and maintain its financial viability. A credit crunch has a number of Countrywide’s smaller peers to bankruptcy.
“Countrywide has reduced approximately 60 positions in its Denver Wholesale Lending Division’s subprime operations area, in order to align the company’s work force with the recent changes in the mortgage market,” the company said in a statement.
The nation’s credit worries have grown as the secondary market for mortgages—where investors buy loans in bulk that allow lenders to lend more money—all but disappeared in recent weeks. Investors have worried about lower housing values, along with the value of loans, rising delinquencies and defaults.
Subprime loans account for about 4 percent of the company’s loan volume in the second quarter.
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Information from: The Denver Post,
