Customers have been telephoning or visiting Countrywide Bank offices in several cities across the country asking about the security of their deposits. In some cases, people have withdrawn money, although there is no sign of massive panic.
Countrywide is the nation's biggest mortgage lender in terms of loan volume, and many rivals are struggling to regain the confidence of investors and depositors amid a surge in defaults that has made it harder for the lenders to borrow money and raised questions about their financial health.
Countrywide announced yesterday that it has eliminated about 500 jobs in its Full Spectrum and Wholesale lending divisions. Full Spectrum specializes in mortgages below prime quality, including Alt-A loans, which often involve borrowers who don't document their incomes. Investor demand for such loans has plunged. The wholesale division arranges loans through brokers. Countrywide said its work force currently totals more than 60,000.
Countrywide shares fell $1.62, or 7.6%, to $19.81 in 4 p.m. composite trading yesterday on the New York Stock Exchange.