Countrywide reported a record number of foreclosures in December that marks a continuation of the subprime mortgage crisis that plagues the US economy. Now, many analysts are speculating that the mortgage giant may be forced into bankruptcy if things get any worse. This could spell bad news for consumers who will find it more difficult than ever to obtain new home loans as liquidity for mortgage securities declines substantially and lending standards increase due to more government oversight.

From Reuters:
Countrywide Financial Corp, the largest U.S. mortgage lender, said on Wednesday that foreclosures and late payments rose in December to the highest on record, sending its shares tumbling for a second day to their lowest in nearly 13 years. Analysts attributed Wednesday's drop to deteriorating credit quality reflected in Countrywide's monthly operating report, and renewed concern the lender might not survive the housing crunch and could seek bankruptcy protection. On Tuesday, Countrywide rejected bankruptcy rumors.