Countrywide says Foreclosures Highest on Record

Regardless of how many times Neil Cavuto or any other financial pundit tells you how peachy the housing market is, the reality is far different.

Countrywide Financial Corp (CFC.N), the largest U.S. mortgage lender, said on Wednesday that foreclosures and late payments rose in December to the highest on record, though it made more loans than expected in the fourth quarter.

Its shares fell as much as 20.2 percent as concern persisted that Countrywide might seek bankruptcy protection. The shares fell 27.4 percent on Tuesday though Countrywide rejected an identical rumor.

"Rumors of bankruptcy are still surrounding Countrywide," said William Lefkowitz, options strategist at brokerage firm vFinance Investments. "Investors still believe that they need an infusion of capital."

In its monthly operating report, Countrywide said the foreclosure rate among the 9.03 million mortgages for which it collects and processes payments doubled to 1.44 percent from 0.70 percent a year earlier, and rose from November's 1.28 percent. The delinquency rate rose to 7.20 percent of unpaid balances from 4.60 percent a year earlier.