Countrywide Financial Corp. has borrowed $11.5 billion from 40 of the world’s largest banks and is speeding up plans to move its mortgage loan production over to its banking division, Countrywide Bank FSB.

The move — announced a day after a Merrill Lynch analyst said the nation’s largest lender could face bankruptcy if it’s unable to obtain money to continue making loans — was a response to liquidity shortages and a lack of demand for securities backed by non-agency mortgage loans, Countrywide officials said.

Secondary market demand for mortgages that aren’t eligible for repurchase by government-sponsored entities (GSEs) Fannie Mae or Freddie Mac has “been disrupted in recent weeks,” Countrywide President and Chief Operating Officer David Sambol said in a statement. “Along with reduced liquidity in the secondary market, funding liquidity for the mortgage industry has also become constrained.”

Friedman, Billings, Ramsey Group Inc. analyst Paul Miller said today that if liquidity remains scarce for more than three months, Countrywide could be forced to seek bankruptcy protection from creditors.

If it can’t get money to continue funding loans, Countrywide might be forced to sell its assets at a deep discount, putting “tremendous pressure on its book value and stock price,” Miller wrote in a report on the lender. Merrill Lynch & Co. analyst Kenneth Bruce drew similar conclusions in a report issued yesterday.

Countrywide has acknowledged such concerns itself in previous reports to investors.

In its most recent quarterly report, the company warned that “a prolonged period of secondary market illiquidity” could reduce loan production volumes, and impact the lender’s future earnings and “financial condition.”

Countrywide’s loan production for July fell short of the $40 billion mark for the first time since February, while foreclosures as a percentage of principal balance rose above 1 percent.

Because investors are less willing to fund loans that are not eligible for delivery to Fannie and Freddie, Countrywide said today it has tightened its underwriting standards and expects 90 percent of the loans it originates will be GSE-eligible or meet its banking division’s investment criteria.

Countrywide said its strategy to survive the liquidity crunch is to fund all of its mortgage loan production through Countrywide Bank by the end of September. More than 70 percent of total origination volume has already been moved to the bank, Countrywide officials said.

But by drawing on an existing unsecured $11.5 billion credit facility, Countrywide diminished its future borrowing capacity. Countrywide said more than 70 percent of the loan has an existing term greater than four years, and the remainder has a term of at least 364 days.

Moody’s Investors Service and Fitch Ratings cut their ratings on Countrywide’s senior debt to the lower end of the investment grade scale. 

In an Aug. 2 statement, Countrywide said it has nearly $50 billion of “highly reliable” short-term funding available as a cushion that would it allow it to continue funding loans until investor demand improved.

“It is important to note that the company has experienced no disruption in financing its ongoing daily operations, including placement of commercial paper,” the statement said.

Countrywide investors have not been reassured by such statements, with the stock falling 13 percent on Wednesday and another 15 percent in mid-day trading today. At $18, the stock was down 60 percent from its 52-week high of $45.26.

Fears that the Calabasas, Calif.-based lender’s problems threaten the mortgage lending and financial industry helped send the Dow Jones Industrial Average and other stock indexes down sharply Wednesday and Thursday.

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