The Wall Street Journal today reported that US investors have been speculating that legendary billionaire investor Warren Buffett could acquire certain businesses of the biggest US mortgage lender, Countrywide Financial.

Countrywide Financial Corp, which had bought most of the assets of another US mortgage lender HomeBanc Corp that filed for Chapter 11 bankruptcy protection after the sale and shut shop.

Last week Merrill Lynch advised its clients to sell shares in Countrywide, saying, "If liquidations occur in a weak market, then it is possible for Countrywide to go bankrupt." The warning came a day after Countrywide announced that foreclosures and mortgage delinquencies had risen in July to their highest levels since early 2002. (See: Countrywide Financial stock slides on rumours of bankruptcy)

According to the online edition of the The Wall Street Journal, Countrywide's debt-servicing business and its portfolio of mortgages and mortgage-backed securities may be attractive to Buffett, citing unnamed investors.

Buffett has been increasing his stake in financial services companies, including those with significant exposure to the mortgage market and according to a regulatory filing by Buffett's company Berkshire Hathaway earlier this month, ithad made an investment in Bank of America , one of the six largest US mortgage lenders.

Countrywide suffered growing defaults as rising interest rates made it harder for people to pay their mortgages. Several home loan providers have gone bust while many others are struggling with rising defaults, the refusal of investors to buy loans they make, and the unwillingness of banks to extend credit.

Countrywide, which is being closely monitored by U.S. regulators, sought to reassure investors earlier on Monday that it is safe to do business with the company.

Buffett told TV network CNBC last week that the worsening credit and housing markets may present some "real" investment opportunities.