Monday's Financial Winners & Losers

Concerns about Countrywide FinancialCFC dragged on financial stocks Monday, after ratings agencies expressed concern about the lender's debt and an analyst said Bank of America BAC should "walk away" from their proposed deal.

A Friedman, Billings Ramsay analyst suggested BofA should at least lower its offer price for Countrywide. Meanwhile, Standard & Poor's on Friday downgraded the lender's debt to junk status, and Fitch Ratings on Monday put the lender's debt on its "Rating Watch Evolving" list. The stock tanked closed down 62 cents, or 10.4%, to $5.36.

Other mortgage lenders, like Washington Mutual WM fell on the news, losing 7.9% to $11.22. The NYSE Financial Sector Index declined 69.99 to 7,902.48.

In other lender news, Rep. Barney Frank (D., Mass.) expressed concern about reports that people are having difficulty obtaining a jumbo mortgages, even after Congress changed rules that were supposed to loosen the market for big loans. He said he will hold a hearing on May 21 to question mortgage bankers and government-sponsored entities like Fannie MaeFNM and Freddie MacFRE. Freddie Mac gave back 5.8% to $25.52 and Fannie Mae was trading at $28.29, a loss of 4.1%.

Shares of bond insurers AmbacABK dropped 8.9% to $4.90 and XL CapitalXL closed down 8.5% to $34.57, after rival FGIC said it had received proposals to assist the company in raising capital. Goldman Sachs is helping FGIC get capital to keep the company going. It was also reported on Monday that State StreetSTT holds a 6.9% stake in Ambac.

American Insurance GroupAIG gave back $1.65 to $47.39.