Mumbai: Countrywide Financial Corp, the biggest US mortgage company, has lined up $12 billion of additional financing to help weather a housing slowdown. (See: Countrywide says it has already addressed its funding needs)

The new credit line comes on top of the $11.5 billion that Countrywide secured last month through bank credit lines amidst reduced access to the commercial paper market, where the company usually borrows. Bank of America, the second-biggest US bank, had separately invested $2 billion in Countrywide. (See: Countrywide gets $2 billion capital boost from Bank of America)

Calabasas, California-based Countrywide said it had funded $34.4 billion of mortgage loans in August, the lowest this year and down 17.3 per cent from a year earlier, as it tightened lending standards. Daily loan applications fell 11.8 per cent to $2.33 billion.
Countrywide''s pipeline of mortgages being processed fell 16.8 per cent from July to $51.8 billion.

Countrywide this summer stopped making home loans that don''t meet its own banking unit''s investment criteria, or which aren''t eligible to be securitised by such entities as Fannie Mae and Freddie Mac.

Less than four per cent of Countrywide''s home loans in August were subprime, or intended for people with weak credit.

Countrywide, meanwhile, said it would fire up to 12,000 employees, or about 20 per cent, by December.

Motgage companies have announced well over 50,000 job cuts this year. Memphis, Tennessee-based First Horizon National Corp announced 1,500 layoffs, mainly in mortgages, while Seattle-based Washington Mutual Inc announced 1,000 mortgage-related job cuts.

Countrywide stock, which has lost more than half its value this year, climbed 13.9 per cent and closed $2.31 higher at $18.93 on the New York Stock Exchange.


also see : General reports on Banks & Financial Institutions