Results from Countrywide Financial and MasterCard on Tuesday underscored the declining state of the US economy as mortgage defaults soared and more consumers turned to credit cards for basic purchases.

Countrywide, the largest US mortgage lender, said it lost a larger-than-expected $893m in the first quarter as provisions for credit losses jumped ten-fold to $1.5bn and charge-offs on bad loans rose to $606m from $39m.