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Countrywide Director Quits

Henry Cisneros steps down two days ahead of earnings.

Henry G. Cisneros, a former secretary of the U.S. Department of Housing and Urban Development, has quit

Countrywide Financial's


board of directors.

The move comes just two days before the company, which has come under fire for its business practices and the stock-selling spree of its deeply tanned chief executive, is due to post third-quarter earnings. Wall Street expects a loss of $1.26 a share.

Cisneros, a Countrywide board member for the past six years, is planning to dedicate more time to CityView, a firm that provides financing for homebuilders in urban areas. He is currently chairman of CityView.

"I need to focus my time and energies on putting CityView in the best position to adjust to the demands of the period ahead," Cisneros said in a statement. "I admire Countrywide's contributions toward helping American families purchase their own homes, and I have immense respect for Countrywide, its management team, its leadership and its workforce.

The departure of Cisneros is another black eye for the troubled lender, which has become the poster child for the housing downturn.

Countrywide, the nation's largest mortgage company, was hit with a severe liquidity crisis this summer and was forced to draw down an entire $11.5 billion credit line. It also got an investment from

Bank of America

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in order to continue funding loans.

Most recently the company has been under scrutiny by the

Securities and Exchange Commission

for CEO Angelo Mozilo's accelerated stock sales under a 10b5-1 plan. Several activist groups, including CtW Investment Group, are circling around Countrywide and calling for the resignation of Mozilo over the stock sales.

"My respect for the Countrywide Board of Directors and its leader, Angelo Mozilo, is unwavering," Cisneros said. "Countrywide is a well managed company and I have enormous confidence in the leadership that has guided Countrywide through many different mortgage cycles."

Cisneros began his tenure as part of Countrywide's board in 2001 at the same time it launched a campaign to fund $1 trillion in home loans to minorities and low-income borrowers by 2010. As of Aug. 31 the nation's largest lender had funded approximately $789 billion toward that goal, Countrywide said.

He served as Secretary of HUD for four years in the 1990s under the Clinton Administration.

Countrywide has engaged a search firm to assist it in identifying "one or more independent director candidates" to join the company's board, it said.

Shares fell $1.22 or 8% on Wednesday to $13.83.