COUNTRYWIDE CUTS JOBS RISING INTEREST RATES DAMPEN REFINANCE BOOM.

Byline: Gregory J. Wilcox Staff Writer

CALABASAS - Countrywide Financial Corp. has shed about 500 jobs, most of them temporary or contract workers, since July as rising interest rates have chilled the refinancing boom.

But the refinance market is not totally out of steam.

Refinance activity soared 45.5 percent for the week ending Sept. 5 from the prior week as interest rates dipped to 5.99 percent from 6.25, the Washington, D.C.-based Mortgage Bankers Association of America reported Wednesday.

It's the first interest rate decline in two months, according to the group's weekly survey.

Refinancings accounted for 55 percent of all mortgage originations, the group said.

While the percentage increase in refinancing was large last week it was less that one-third the level of activity when the boom was peaking in early June, the group said.

That's why Countrywide's job shedding is not surprising.

The cuts were on the origination side of Countrywide Home Loans and Full Spectrum Lending and at LandSafe, a wholly-owned subsidiary that does applications, title searches and credit reporting, said company spokesman Rick Simon.

``This is the initial step in adjusting our staffing levels to keep pace with the market environment,'' he said, noting that these kinds of moves are taking place throughout the industry.

Since the positions were mostly filled by temporary or contract workers there will be less of an impact on the company's regular work force as business reacts to the rising rate market.

Countrywide also continues to hire sales people in other areas like loan servicing.

``In the long run we anticipate we will increase market share and that will require growth of our entire origination operation,'' Simon said.

Last week's rate decline prompted a 22.8 percent increase in origination activity, according the bankers association survey.

``Consumers are taking advantage of a dip in interest rates. (It) shows consumer attention to possibly the final opportunity to capture a temporary rate drop in a rising rate environment,'' Doug Duncan, the association's senior vice president and chief economist, said in a statement.

The survey covers approximately 40 percent of all U.S. retail residential mortgage originations and has been conducted weekly since 1990. It includes mortgage bankers, commercial banks and thrifts.

And while activity increased last week it's not likely a second wind for the refinance market.

``Interest rates have increased roughly 130 basis points since reaching historic lows in mid-June, signaling the apparent end of this unprecedented refinance boom,'' Stanford L. Kurland, Countrywide's chief operating officer, said in a statement on Tuesday when the company released operating data for August.

It's been quite a ride, though.

From January through August, Countrywide's volumes totaled a record $325 billion, $74 billion more than the total fundings produced in all of 2002.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com