Countrywide Financial said on Thursday foreclosures had doubled in November, while late payments continued to rise amid the US subprime housing crisis.

Mortgage loan fundings and daily loan applications also declined year on year, said the biggest US mortgage lender,

Loan fundings fell 40 per cent to $23bn from $38.3bn a year earlier while average daily loan applications fell 32 per cent on the year to $1.9bn.

The bulk of the decline was attributable to an almost total shutdown in the lender’s subprime business and a sharp fall in adjustable-rate mortgage

Shares in the lender fell 5.1 per cent to $9.99 by mid-afternoon in New York when it revealed that foreclosures in its loan servicing business, measured as a percentage of unpaid principal, rose to 1.3 per cent from 0.6 per cent a year earlier. Late payments rose to 6.5 per cent of unpaid balances from 4.2 per cent. David Sambol, the chief operating officer, said: “November’s operating results reflect the trends of today’s mortgage market,”

Mr Sambol said Countrywide Bank, the banking arm, was on track for growth. Retail deposits totalled $31bn at the end of November, up from $29bn in October and $24bn a year ago.

Countrywide’s shift in emphasis to retail deposits reflects in part its inability to raise funds in the wholesale and commercial paper markets.

The company has been borrowing heavily from the Federal Home Loan Bank system and is offering above-average interest rates on deposit accounts to attract customer funds.

Analysts at Egan Jones, the ratings agency, said the company’s business model was being tested on numerous fronts and it might need to consider more sources of funding.

Mr Sambol hailed the Bush administration’s plan to freeze rates on $500bn of adjustable rate mortgages, the so-called Hope Now Alliance initiative.

Analysts at Fox-Pitt, Kelton, the brokerage, said last month that Countrywide was the mortgage lender most likely to benefit from the plan.

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