Countrywide takes further steps to stabilize finances
Embattled Countrywide Financial, the nation's No. 1 writer of mortgage loans, was forced to tap an $11.5 billion line of credit Thursday to address its looming liquidity crunch, and it said it is toughening the underwriting standards on the home loans it will make going forward.
The unusual step taken by Countrywide (Charts, Fortune 500) only fed fears about the problems facing the company. In premarket trading, shares plunged $3.69, or 17 percent, to $17.60 from Wednesday's close of $21.29.
As the demand for mortgage securities has collapsed, the company has been forced into further steps to keep the companies finances going. This will be expensive for Countrywide as they where selling the securities while this way they will be borrowing money.
Jay