Countrywide Wholesale to Eliminate all Subprime ARM Products Tomorrow

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According to our account resources, Countrywide Home Loans will eliminate all subprime ARM loan products tomorrow for their wholesale partners; leaving only the 15, 20 and 30-year fixed mortgage products available for brokers. This follows on the heals of Angelo Mozilo’s statement that Countrywide is “out of subprime” and marks a massive 180 from an industry built on short-term adjustable rate mortgages for people with less-than-perfect credit histories.

This change eliminates the remaining ARM products such as the 5-year, 7-year and 10-year fixed ARMs that were available after the company moved (along with the rest of the industry) a couple of months ago to eliminate the short-term 2-year and 3-year ARMs that made up the majority of loans written in the subprime market for 2005 & 2006.

This change affects the wholesale channel on the subprime side only – no word if it affects the Full Spectrum retail arm of Countrywide. It’s just another sign of the ongoing atrophy of the wholesale origination market and a clear symptom of capital markets investors fear of short-term subprime mortgages.

This is just a wild guess – but those 30-year rates are going to suck, big time.