Countrywide offers reassurances

The mortgage lender borrowed $11.5 billion to keep making home loans.

LOS ANGELES (AP) — Countrywide Financial Corp., the nation’s largest mortgage lender, sought to reassure customers Monday that the liquidity problems dogging its mortgage operations were not affecting its banking unit.

The assurance came amid a report that Countrywide has started laying off an undisclosed number of employees as it tries to ride out the credit crunch that has rocked the home loan industry.

The job cuts occurred in Countrywide’s Full Spectrum Lending unit, which handles mortgages given to customers with minor credit problems or who can’t provide full income documentation required for traditional prime loans, The Wall Street Journal reported, citing an internal e-mail sent Friday to employees of that division.

Countrywide Financial spokesman Daniel Weidman did not immediately respond to a phone message from The Associated Press seeking comment.

The Calabasas-based company ran full-page ads Monday in U.S. newspapers, including the Los Angeles Times and Detroit Free Press, in which it asserted “the future is bright” at Countrywide Bank FSB.

The ads noted the bank has more than $100 billion in assets, investment-grade ratings from three major credit agencies, and that the credit woes rocking its mortgage lending business don’t affect federally insured deposits at its 105 financial centers around the nation.

Bankruptcy warning

It’s a message Countrywide has tried to get across since last week, when a Wall Street analyst suggested the company could end up in bankruptcy if the liquidity crunch sparked by rising mortgage defaults worsens.

Countrywide said last Thursday it had borrowed $11.5 billion so it could keep making home loans.

The developments left many Countrywide Bank customers frazzled over the security of their deposits. Many have converged on bank branches in search of answers.

The lobby of a branch in West Los Angeles was packed Monday with nervous people waiting to speak with bank officers to make sure their assets were safe.