Countrywide Communicates to Brokers After Earnings

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Here is the email we received from Countrywide after its 3rd quarter earnings were released. I think that in general Countrywide may have survived this round, but is far from out of the woods. The letter below seems like every other press piece put out by Countrywide; but what do I know? Of particular note is the investment in Countrywide by Bank of America and the latter’s subsequent termination of its wholesale lending channel. Is it a harbinger for things to come at Countrywide? What do you think?

A letter from the President & COO of Countrywide Home Loans

October 26, 2007

Dear Valued Business Partner,

Over the last four decades, Countrywide has enabled approximately 20 million borrowers to achieve the dream of homeownership. While we are extremely proud of this and our many other accomplishments, we understand at the most basic level that our success would not be possible without you. Please know that Countrywide deeply appreciates our partnership with you—past, present and future.

When it comes to ensuring your business success, we believe that the Countrywide value proposition is unique. We have a singular, dedicated focus on real estate finance. This focus provides you with a competitive edge that can be leveraged to grow your business. These advantages include:

A broad suite of competitively priced loan products

Industry-leading technology

Operational excellence based on integrated sales, distributed fulfillment and mortgage-backed security bond distribution

Tenured, skilled and talented personnel

Over the last weeks and months, the global credit market upheaval has created many challenges, and the impact to the housing market has been dramatic. Countrywide reacted decisively, and we have taken the steps we believe are necessary to address the current challenging market. Despite market concerns about liquidity, at the height of the turmoil, the largest and most prestigious bank in the country demonstrated its confidence in Countrywide’s future by providing the company with a $2 billion capital infusion. With this strategic investment, our equity position is more than $15 billion as of September 30, 2007.

While we incurred a 3^rd quarter loss due to the market turmoil and resulting write-downs and loss reserves, we expect to return to profitability in the 4th quarter of this year, and into 2008. Countrywide has the necessary capital, liquidity and financial resources to support our operating and growth needs. We are currently integrating our mortgage lending operations into Countrywide Bank and expect that this transition will strengthen our business model and provide additional competitive advantages. The support of Countrywide Bank also brings access to more stable sources of liquidity.

Countrywide is synonymous with leadership and achievement in virtually every aspect of real estate finance. We are a company that champions unquestionable ethics, morals and business practices. For nearly 40 years, we have focused on real estate finance and have helped millions of Americans realize the dream of homeownership. Equally important to putting people into homes of their own is keeping them there. We recently announced our efforts to assist more than 80,000 homeowners who are currently experiencing difficulty making their mortgage payments.

There’s no doubt that the recent market disruptions have presented us with unique challenges, but we also see opportunities. Countrywide is strategically positioned to benefit from the consolidating industry, and we will continue to be a market leader.

We are determined to put our superior business model and unsurpassed excellence to work for you and your clients. Thank you for continuing to choose Countrywide. Your partnership is invaluable, and we look forward to continuing to play a critical role in your long-term growth and success.

Sincerely,

Andrew Gissinger III
President & Chief Operating Officer
Countrywide Home Loans