Delinquencies as a percentage of unpaid principal balances rose to 5.85 percent from 4.04 percent a year earlier, Countrywide said.
Company officials said the sharp dropoff in activity is attributable to conditions of the real estate industry, which is in a prolonged sales slump. Financial institutions, meanwhile, have sharply tightened lending restrictions in light of the major increase in defaults caused by resetting of adjustable-rate mortgages to higher fixed rates.
"The Company is continuing to take the necessary steps to assist borrowers with foreclosure avoidance and investors with loss mitigation," Countrywide President and COO David Sambol said in a statement.
The slowdown also affected Countrywide's commercial funding, with volume for September at $242 million, down from $646 million in September 2006.
The mortgage loan servicing portfolio continued its growth, reaching $1.46 trillion, up 17 percent, or $215 billion, from September 30, 2006.
- Reuters contributed to this report