Countrywide boosts ability to borrow money

Struggling mortgage lender now has access to $12 billion more

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updated 2:04 p.m. ET Sept. 13, 2007

CALABASAS, Calif. - Countrywide Financial Corp. boosted its borrowing capacity by $12 billion as the mortgage lender struggles to weather the slowdown in the housing market, the company said Thursday.

The move came after the largest U.S. home lender borrowed $11.5 billion and sold a $2 billion stake to Bank of America in recent weeks so it could keep operating its retail banking and mortgage businesses.

Countrywide said it arranged the $12 billion in additional borrowing capacity through new or existing credit agreements.

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Shares of Countrywide rose $1.46, or 8.7 percent, to $18.08 in afternoon trading Thursday.

Countrywide also saw a 17 percent drop in its new home loans for August compared with the same period last year. The amount of funding totaled $34 billion

The company processed $2.3 billion in loan applications a day, marking a decline of 12 percent.

Countrywide said the declines reflect current problems in the mortgage industry, which include slipping home values and decaying credit quality.

Loans in the pipeline at the end of August shrank to $52 billion from $64 billion at the end of August 2006.

The company said its retail banking business had boosted assets on hand to $94 billion as of Aug. 31, compared to $87 billion in the same month last year.

Countrywide expects to benefit as market conditions force weaker mortgage lenders out of the game. It has also said it intends to cut as many as 13,000 jobs.