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Countrywide: Mortgage Lending Slid 44% Last Month

Countrywide Financial said Thursday September mortgage lending fell 44.3 percent from a year earlier as it tightened underwriting standards, while delinquencies surged and commercial lending also dropped dramatically.

Mortgage loan fundings totaled $21.2 billion, down from $38.1 billion a year earlier. Fundings of adjustable-rate mortgages slid 76 percent, while "nonprime" loan fundings tumbled 92 percent. Countrywide is the second-largest issuer of subprime loans in the U.S.

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