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Countrywide, WaMu Walloped

Liquidity worries soak a pair of big mortgage lenders.

Updated from 9:48 a.m.

Countrywide

(CFC)

slid 7% and

Washington Mutual

(WM) - Get Waste Management, Inc. Report

dropped 4% after the mortgage lenders warned that collapsing demand for nonprime mortgage securities could hurt them.

The companies added the warnings to the sections on risk factors in their quarterly filings with regulators, made Thursday afternoon.

"Since the company is highly dependent on the availability of credit to finance its operations, disruptions in the debt markets or a reduction in our credit ratings could have an adverse impact on our earnings and financial condition, particularly in the short term," Countrywide said in the risk factors section of a filing made late Thursday.

WaMu sounded a similar tune, referring specifically to the recent freeze in the mortgage securities market. "While these market conditions persist," WaMu said, "the company's ability to raise liquidity through the sale of mortgage loans in the secondary market will be adversely affected."

Countrywide shares have been tumbling since problems with the subprime mortgage market came to light back in February. The stock hit a 52-week high of $45 just before rivals like

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HSBC

(HBC)

,

New Century

(NEWCQ)

and

NovaStar

(NFI)

said they would take big losses on loans gone sour to homeowners with poor credit histories. New Century subsequently filed for Chapter 11 bankruptcy.

Countrywide dropped as low as $23.64 Monday amid worries about the health of the credit markets before bouncing back during a widespread market rally earlier this week.

Countrywide shares fell $2.11 to $26.55 after trading as low as $24.71 earlier, while WaMu dropped $1.72 to $35.04.