Countrywide up on buyout speculation

Shares of Calabasas-based mortgage giant Countrywide Financial Corp. got a lift Tuesday from buyout speculation, while news from elsewhere in the home loan business remained downbeat:

San Diego-based Accredited Home Lenders Holding Co. said it agreed to sell $1 billion of home loans to an unnamed investor, a move it said would limit its exposure to “margin calls” -- demands by its creditors to pay down debt.

In Tucson, Ariz., First Magnus Financial Corp. filed for bankruptcy protection less than a week after the mortgage lender suspended its operations.

Meanwhile, Countrywide shares jumped $1.98, or 10%, to $21.79 after a Wall Street Journal story quoted investors speculating that Warren Buffett’s Berkshire Hathaway Inc. might be interested in buying parts of the business. Countrywide’s debt-servicing business and its investments in high-quality mortgages may be attractive to Berkshire, the newspaper said.

Countrywide stock slumped 23% last week on worries that the company could face solvency issues as Wall Street remained reluctant to provide credit to mortgage companies.

Amber Cousins, a spokeswoman for Countrywide, didn’t return a call seeking comment. Buffett didn’t respond to a request for comment through spokeswoman Jackie Wilson.

Accredited Home Lenders said it expected to complete the sale of $1 billion in loans by October, and that half had already been sold.

The company is suing to salvage a takeover offer by private-equity firm Lone Star Funds. The suitor wants to back out of the deal, citing a “drastic deterioration” in Accredited’s condition.

Accredited shares rose 11 cents to $6.55 on Tuesday.

First Magnus said it was caught in the credit crunch that has brought down scores of lenders this year. It ranked as the 16th-largest mortgage lender in the first half of 2007.

“The company went out of business overnight” as credit dried up, spokesman Gary Baraff said. “Three weeks ago we were at the apex of the company’s history.”