Thursday, December 30, 2004

Countrywide cuts Chandler loan officers' pay

Lender slicing commissions
Countrywide cuts Chandler loan officers' pay

Stephanie Paterik
The Arizona Republic
Dec. 29, 2004 12:00 AM
Loan officers at Countrywide Financial Corp. in Chandler say that instead of a Christmas bonus last week they received word their commissions would be slashed come January.

The company's expansion here has been held up as an example of economic vitality, and has been credited by the Greater Phoenix Economic Council with helping boost average salaries in the Valley.

The Calabasas, Calif., corporation's home-loan division, known as Countrywide Home Loans, sent an e-mail to sales representatives throughout the company Dec. 21 preparing them for changes in their compensation. Chandler employees were called into a meeting the next day to learn details.

Top producers will be hit hardest, with commissions dropping from 0.6 percent to 0.4 percent, according to company documents. Countrywide loan officers are guaranteed a minimum of $2,400 a month, but most rely on their commissions to exceed that amount. A top producer who sells 38 home loans totaling $1.4 million in one month would take home $5,600 under the new plan, as opposed to $8,400 under the old system.

The news has socked morale at the Chandler campus, said loan officer Daria Jackson, 24, of Chandler. Some employees have quit and others are circulating résumés, she said.

"They lure you in and cut compensation by half the week of Christmas," Jackson said. "They said, 'We're posting increased revenue quarter over quarter, but we're cutting your compensation.' It doesn't make sense."

Countrywide spokesman Ken Preston refused to comment on the changes because they are "an employee matter."

According to the internal e-mail, Countrywide plans to adjust its costs to remain competitive in an expanding primary home-equity market and to offset declining revenues in the secondary market. The primary market refers to selling loans directly to consumers. The secondary market is when one financial institution sells a loan to another.

The news comes at a time when the company has been growing. Countrywide has added 420 employees in Chandler this year, both in sales and operations, and plans to hire 1,600 more in the next three years as part of a major expansion. The company also is seeking city approval to add 350,000 square feet to its Chandler facility, on Chandler Boulevard between Loop 101 and Dobson Road.

Despite changes, Preston said the new jobs will be high quality, well paying and a benefit to the community.

Jackson said she doubted the company's ability to retain and attract workers without competitive pay.

"There are a lot of upset people," she said. "I don't even know how they're going to keep this center open in Chandler because they're going to lose so many people."

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