Mozilo: MSR Growth Key to Profitability.(Angelo Mozilo, Countrywide Credit Industries Inc.'s market share)

NEW YORK -- Countrywide has made no bones about its ambitious growth plans, and in a recent speech to investors, chairman and CEO Angelo Mozilo illustrated how the company plans to leverage its huge mortgage servicing portfolio to generate profits across the enterprise.

And while Countrywide expects to see lots of merger and acquisition activity taking place in the industry, Mr. Mozilo made it clear that Countrywide hopes to continue picking up market share primarily through organic growth. In the current "transition" environment facing the mortgage industry, he said Countrywide is poised to gain share by hiring talented originators.

Countrywide reiterated its goal of attaining about a 30% share of the mortgage origination market by 2010, and Mr. Mozilo underscored its concurrent goal of attaining 20% of the mortgage servicing market in a talk at a recent Sanford C. Bernstein conference. Currently, Countrywide's servicing market share stands at about 12%.

Countrywide believes that over time it can effect an "opportunistic shift toward recurring spread income" in place of gain-on-sale income, Mr. Mozilo said.

He said achieving a 20% share of the mortgage servicing market is achievable, noting that between 2000 and 2005, Countrywide grew its portfolio at an annual rate of 31%, while industrywide the servicing market grew at an annualized rate of 13%.

And he said technology will help Countrywide manage its portfolio, which totaled over $1.1 trillion in home loans at the end of the first quarter.

"We believe we have the best tech in the industry. In fact we believe we are a technology company that is in the financial services business." Countrywide more than doubled its servicing market share during that time period, fueled in part by recapturing its existing customers who refinanced.