Countrywide Mortgage: Five Major Lenders Will Emerge

The chief executive of Countrywide Financial Corp. said this week that he expects the number of U.S. home mortgage lenders with large market shares to fall to five from 10.

On a Tuesday conference call, Angelo Mozilo said consolidation will take place because it requires more scale and capital to compete effectively.

He noted that many a smaller mortgage company has already quit the industry in the midst of recent market troubles, and we haven’t seen the end of it.

Indeed, the volatile U.S. housing market has claimed many casualties thus far, and the executive pointed to recent consolidation already in progress with larger lenders.

These included Wachovia Corp. purchaing Golden West Financial Corp., the parent of World Savings Bank, last October, and Bank of America Corp.’s 2004 purchase of FleetBoston Financial Corp.

“I think we’ll get to five [mortgage lenders],” Mozilo said. “You’ve seen it in terms of Wachovia and World, and Fleet and Bank of America. Nothing is out of the realm of possibility.”

Calabasas, California-based Countrywide Mortgage is presently the largest U.S. mortgage lender, handling about one-sixth of industry volume.

So far, they’ve weathered the problems suffered by the bad credit home loan industry en masse, and are poised to emerge with a greater market share.

SOURCE: Reuters