Countrywide Selloff Accelerates

The Countrywide (CFC Quote) selloff steepened after CEO Angelo Mozilo said he doesn't expect the U.S. housing market to rebound this year or next.

Shares dropped 12% in midafternoon trading after Mozilo admitted that the nation's biggest mortgage lender was blindsided by a sharp rise in defaults in delinquencies among recent homebuyers.

Countrywide set off a broad decline in shares of banks and lenders Tuesday morning when the company cut its full-year earnings guidance, citing weakening returns in so-called prime mortgages as well as in the subprime loans that swooned this spring. Shares in big rivals such as Downey (DSL Quote) and WaMu (WM Quote) tumbled 4% each. ...