Countrywide Financial Corp. confirmed rumors Friday that it plans to make drastic cutbacks in its workforce, with an announcement after the close of financial markets that 10,000 to 12,000 layoffs are planned in coming months.

The layoffs — which could total up to 20 percent of the company’s workforce — are to take place over the next three months, but might be scaled back if the environment for mortgage lending improves, the company said. Based on current interest rates, Countrywide said it expects loan-origination volume to decline by 25 percent in 2008 compared to this year.

Countrywide, like other mortgage lenders that depended on Wall Street investors to buy the loans it originated, has had trouble funding loans in recent weeks as investors have become concerned about the rise in delinquencies and foreclosures in markets where home prices are falling or stagnant.

After drawing down an $11.5 billion line of credit with 40 banks in August, Countrywide announced it had given Bank of America rights to buy a minority interest in the company in exchange for a $2 billion cash infusion.

Countrywide has said its strategy to survive the credit crunch is to move all of its mortgage loan production from Countrywide Home Loans Inc. to Countrywide Bank, a federally chartered thrift, by the end of September. After tightening its underwriting standards, Countrywide said 90 percent of the loans it originates in the future will be eligible for repurchase by Fannie Mae and Freddie Mac, or meet the criteria for loans held for investment by its banking division.

In recent weeks, Countrywide had announced 1,400 layoffs, including 900 job reductions announced Wednesday and 500 job cuts announced in August.

Until recently, Countrywide had said it would expand its workforce in an attempt to pick up market share from other lenders experiencing similar problems.

In announcing the latest round of layoffs Friday, Countrywide officials said the company’s growth plans “will continue in areas of opportunity.”

Countrywide’s retail and wholesale lending divisions will “continue aggressively pursuing the increased opportunities presenting themselves in the current environment for profitable market share growth,” the statement said.

Countrywide Bank, in addition to housing the company’s mortgage banking activities, will also attempt to grow its residential and commercial loan investment portfolio and expand its financial centers and deposit franchise, the company said. Countrywide’s insurance business will pursue growth in its institutional and personal insurance business lines.

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