Countrywide Delays 30% Share Goal

Countrywide Financial Corp. tempered its aggressive 30% market-share goal by saying it now aims to control that percentage of home loan originations by 2010, two years later than the target date it gave last year.

Angelo R. Mozilo, the company's chairman and chief executive, said in a press release Tuesday that the original goal had been "intended to be a stretch" and was pushed back to reflect Countrywide's "current activities as well as … market conditions." Countrywide had a 14% share in the first quarter, versus 7% in 2001.

Edwin Groshans, an analyst at Swiss Reinsurance Co.'s Fox-Pitt, Kelton Inc., said the revised forecast was still bold but achievable. "It's not like they're making these aggressive goals based off of unrealistic assumptions for the market," he said. "Looking at where they were and at their share gains, it looks likely that … [share growth is] going to continue."

Countrywide is counting on weaker players getting weeded out, which would let it increase its share more rapidly, Mr. Groshans said.

David Sambol, Countrywide's executive managing director of mortgage banking and capital markets, said at an investor forum Tuesday that its strategy includes buying other home lenders. Though it once had "an almost absolute aversion to growing through acquisition, we no longer have this absolute aversion," he said.

Countrywide will look at regional lenders that maintained a focus on home purchase business during the refinance boom and are small enough that Countrywide would not have to spend much time on integration, Mr. Sambol said.

Also, the compensation structure for a target's originators would have to be similar to Countrywide's. With such requirements, Mr. Sambol said, Countrywide probably would not be making many deals.

In addition, Countrywide plans to form more joint ventures with real estate agencies and builders, and to take on more outsourcing work from banks and thrifts. Outsourcing has grown more slowly than expected because of the sustained high volume in the industry, but the pursuit of efficiencies should drive more business to Countrywide, he said.

Also integral to the market-share increase will be the continued expansion of Countrywide's sales force, which Mr. Sambol said it wanted to double from its current 13,000 over the next 10 years. He said most of the growth would be in the retail channel.

At Tuesday's forum, Countrywide executives said it expected to originate $1 trillion of mortgages in 2010. Last year it originated $363 billion.

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