Countrywide Financial, the biggest home lender in the US, on Friday night announced plans for up to 12,000 job cuts, or one-fifth of its workforce, in the next three months as it forecast a slump in mortgage volumes next year.

The company said the job cuts could be lower if interest rates fell and mortgage market prospects improved. But on the basis of the current interest rate environment it was predicting a 25 per cent fall in the total mortgage market in 2008.