Mortgage Refinancing Craze Boosts Countrywide Home Loans

Countrywide Financial Corp., the largest U.S. mortgage lender, on Tuesday said it made 15 percent more home loans in May as the pace of mortgage refinancing increased, though the foreclosure rate doubled.

The Calabasas, California-based company also said it added 1,329 jobs in the month, on top of 1,759 in April, giving it a total of 59,011 employees.

Countrywide has long said it expects to add market share as the U.S. housing slowdown and rising defaults cause weaker rivals to fold or reduce risk. It has boosted staffing 8 percent this year.

Mortgage lending totaled $44.42 billion in May, up from $38.73 billion a year earlier, though nonprime loans, including “subprime,” sank 43 percent to $2.19 billion.

New home loans edged up 2 percent to $18.64 billion, while home loan refinancings increased 26 percent to $25.78 billion. Countrywide said it ended May with $69.74 billion of loans in its pipeline, the most since October 2005.

“Origination volumes should hold up significantly better than the market, despite rising [mortgage rates],” wrote Credit Suisse analyst Moshe Orenbuch. “Given Countrywide’s diverse product set, its production volumes are clearly benefiting, as consumers move back into more traditional products.”

Countrywide said pending foreclosures as a percentage of unpaid principal balances rose to 0.90 percent from 0.45 percent a year earlier, and 0.85 percent in April.

Foreclosures based on the number of home mortgage loans serviced rose to 0.71 percent from 0.47 percent a year earlier, and 0.69 percent in April, Countrywide said. Delinquencies rose to 4.71 percent from April’s 4.45 percent.

The portfolio of loans that Countrywide services grew 18 percent to $1.39 trillion. This may be a sign that the housing market has some life in it yet.