Countrywide: No blow from Freddie loss

The housing slump and credit crunch have slammed Countrywide's stock.

LONDON (CNNMoney.com) -- Countrywide Financial, the nation's largest mortgage lender, said Tuesday that big losses at Freddie Mac are unlikely to significantly dent its business.

Countrywide doesn't believe the loss at Freddie will have a "material impact on our ability to fund loans," David Bigelow, managing director of investor relations, said at an investor conference in New York hosted by Friedman, Billings, Ramsey. The conference Webcast was monitored in London.

Last week, Freddie Mac (Charts, Fortune 500), an important source of funding for mortgage lenders, reported a $2 billion quarterly loss and staggering $8.1 billion drop in the value of its assets, escalating fears there could be more trouble ahead for Countrywide.

Countrywide's (Charts, Fortune 500) stock has plunged nearly 80 percent so far this year amid concerns the lender could file for bankruptcy.

In addition to the housing downturn, which is expected to persist through next year, the company has been dealt a blow by the credit crunch, which has dried up pools of funding. Countrywide's credit costs soared to $1.9 billion in the third quarter, up from $54 million in the year-earlier period.

The lender has come under scrutiny recently for borrowing heavily from the Federal Home Loan Bank of Atlanta, a privately owned bank that is sponsored by the government.

Sen. Charles Schumer, D-N.Y., pressed regulators Monday to look into the sharp rise in lending, saying it could pose risks to other regional banks in the Federal Home Loan Bank system.

During the presentation, Bigelow defended the bank's borrowing. Countrywide has a "long-standing and close relationship" with the bank and is in "full compliance" with its collateral requirements, he said.

He also said Countrywide was strong enough to withstand the housing slump and challenging credit environment.

"We believe we have adequate liquidity to fund our growth and operating needs," Bigelow said, adding that the company has strengthened its liquidity position since Sept. 30, when it had $33.5 billion of available liquidity.