CALABASAS, Calif. – Shares of Countrywide Financial Corp., the nation's largest mortgage lender, plunged yesterday after the company denied rumors that it was planning to file for bankruptcy protection.
Countrywide shares, in a free-fall the past eight months, fell more than 28% yesterday to $5.47, after sinking to a 52-week low of $5.05. That’s down from a 52-week high of $45.90.
In a prepared statement released earlier in the day, the company said there was "no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company."
The stock also was shaken by a report in The New York Times that said court records show the lender fabricated documents related to a bankruptcy case of a borrower.
The home lender, a correspondent for hundreds of credit unions, has suffered as more borrowers have defaulted on home loans, particularly subprime mortgages, and reported a $1.2 billion loss in the third quarter of last year.
