Countrywide Credit Industries' president and co-founder, David S. Loeb, has sold most of his shares, compounding market perception that the home lender is in for tough sledding.

According to First Call/Thomson Financial, Mr. Loeb sold 181,500 shares July 27 at $38.89 and 818,500 the next day at $37.63. He still holds 191,361 shares.

Countrywide's stock has fallen sharply in the last month as rising interest rates have clipped mortgage origination volume. The stock was trading midday Monday at $34.1875, off 18.5% from mid-July.

Analysts said Mr. Loeb's liquidation contributed to the recent slide.

"Obviously, the signal is not good," said Gary Gordon, an analyst at PaineWebber. "If he thought the stock was going back to $60 in a hurry, I don't think he'd be selling in the high 30s."

Mr. Loeb could not be reached for comment. Countrywide did not return calls by press time.

Mr. Loeb, 75, has not been involved in the day-to-day management for several years. Analysts said he is believed to have sold his shares to raise cash for other investments.

Despite the insider sale, analysts are bullish on Countrywide, arguing the stock is undervalued. Last week Mr. Gordon upgraded the company to "buy" from "attractive,'' and Joel J. Houck, an analyst at A.G. Edwards & Sons, reiterated his "buy'' rating.

Last year brought the biggest boom in home lending in history, as falling interest rates prompted homeowners to refinance in droves and encouraged other consumers to buy homes or trade up. This year rates have moved the other way, volume has dropped off, and mortgage stocks have been punished.

But servicing - the business of collecting and processing loan payments - has become more lucrative because borrowers are less likely to refinance. Countrywide is big both in originations and servicing - a strategy it calls the "macro hedge'' because theoretically it should keep earnings stable through interest-rate cycles.

But the market has not seen this strategy work in earlier boom-bust cycles, Mr. Houck said, so investors are not giving Countrywide credit for its $230 billion servicing portfolio. Back in early 1994, when the last refinance boom ended, the company's earnings fell precipitously.

Much has changed since then, Mr. Houck said. For one thing, new accounting rules allow Countrywide to recognize in its earnings the increased value of the servicing. Moreover, the portfolio has tripled in size in the last five years and is now 2.5 times the size of Countrywide's annual production, compared with 1.6 times in 1994, the analyst noted.

Once investors see the company demonstrate it can sustain earnings in a rising rate environment, Mr. Houck predicted, they will regain confidence and the stock will rise to his target of $64.

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