Countrywide shares sink on downgrade

"As subprime mortgages defaulted at increasing rates in recent months, Countrywide shifted its origination focus to almost wholly offer loans that fit Fannie Mae and Freddie Mac lending guidelines, anticipating it would be able to sell those loans easily... The constraints of not having Freddie Mac readily purchasing mortgages is likely to further limit credit and lead to even steeper declines in housing prices, Shapiro wrote in the note."