Countrywide Credit Industries Inc., the nation's largest independent residential mortgage lender and servicer, is on track for a record year both company wide and in its rapidly growing e-commerce arm.

Overall, Countrywide funded $7.3 billion of mortgage loans in August 1998 and the pipeline of loans in process totaled $13.1 billion at August 31, 1998.

"Countrywide's production performance in August was highlighted by fundings of $7.3 billion," said Angelo R. Mozilo, chief executive officer. "This brought our fundings for the second fiscal quarter to $22.9 billion, an all-time company record. Applications remained near record levels and maintained the pipeline at $13.1 billion. Our production operation continues to capitalize on this fertile rate environment, concurrently benefiting from robust purchase and refinance business."

The e-commerce division, which takes mortgage applications for purchases and refinancing online through the Internet, took more than 840 new applications for a total of $90 million in August 1998. Of that, 520 were funded for a total of $57 million.

Granted, $57 million is just a drop in the $7.3 billion bucket, but the amount of loans funded through the Internet is growing like kudzu.

"The number of online loans we do is increasing at a rate of 11% a month," said Cameron King, executive vice president at Countrywide responsible for, among other duties, Countrywide's e-commerce. "It's like clockwork. This has been in the black since June 1997."

It's a good time to be in the mortgage business. Countrywide's fixed-rate loan production amounted to $7.0 billion, or 95% of total production, in August 1998 versus $2.7 billion, or 72% of total production, in August 1997.

Purchase mortgage activity was $3.5 billion in August 1998 and $2.5 billion in August 1997. Refinances represented 52 percent of total fundings in August 1998 and 33 percent in August 1997. The company funded $179 million of home equity loans in August 1998 and $127 million in August 1997.

The company's servicing portfolio increased to $195 billion at August 31, 1998, 15 percent higher than the $169 billion portfolio at August 31, 1997. The portfolio had a weighted average coupon of 7.7 percent at the end of August 1998 and 7.8 percent at the end of August 1997.

The money flowing is great news, of course, but one statistic has King ecstatic. It directly affects REALTORS®.

"In August 21% of our loans originated online were for purchase transactions," King said. "About 62% were refinances.

"This is wonderful, because 99.9% of our competitors online are refinances, where the customer doesn't need a REALTOR®," he said. "We assume most purchases have consumers working with a REALTOR®. That's important to us, because we are a part of the real estate community.

"It's also important for us to capture the purchase transaction market because the refinance market won't always be there if interest rates go up," King said.

King said while loans online is still a minuscule part of the big picture at Countrywide, the potential for growth is astounding.

"There are still a lot of consumers out there who are not comfortable going through the Internet; they would rather go to a broker and pay them to do it all," he said. "It's not for every consumer -- the process is longer and requires the consumer to shop around.

"But the pay off is a better price and the convenience," King said. "You can do it in the middle of the night, at your own pace, there's no appointments and it can be quicker."

The profile of a typical loan seeker who goes through an online application with Countrywide is slightly above average. The loan size they seek runs about $138,000, compared to the typical applicant who seeks a $128,000 loan, on average. Online applicants tend to have more education, are computer savvy, more often younger and with an average combined household income of $68,000.

"This is similar to most studies for Internet users," King said. "Value, convenience and speed are what drives them."

Countrywide (NYSE:CCI) is on a role. For fiscal 1998, which ended in February, Countrywide posted gross revenues of $1.93 billion, a one year sales growth of 35.3%. It posted a net income of $345 million for fiscal 1998, up 34%.

Driving much of the recent gains is the ongoing plummet of interest rates, leading to more refinancings. As stock portfolios have plummeted, investors have sought refuge in U.S. Treasury securities, resulting in record low bond -- and mortgage -- interest rates, mortgage industry analysts say.

Mozilo reported a steady flow of applications for homeowner refinancings throughout the summer months. But he added that the summer vacation season may have slowed refinancing activity.

Last week, average commitment rates on 30-year fixed-rate mortgages fell to an average 6.82 percent, a low not seen since October 1993, according to Freddie Mac , a Congressionally chartered corporation that buys mortgages from lenders and bundles them into securities for investors

Countrywide Home Loans Inc. is the nation's leading independent residential mortgage lender and servicer. Countrywide Credit Industries, Inc., (CCI) is the publicly-owned (NYSE:CCR) parent corporation and umbrella organization for Countrywide's network of wholly-owned financial services companies.

Countrywide, together with its subsidiaries, is a nationwide financial services company with headquarters in Calabasas, Calif. The principal business is mortgage banking-- the origination and servicing of residential mortgage loans.

Countrywide Home Loans, the principal CCI subsidiary, makes first-lien and second-lien residential loans, refinances current mortgages, and issues home equity lines of credit through its loan production divisions.

Published: September 17, 1998

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