Aug. 21 (Bloomberg) -- Countrywide Financial Corp., the biggest U.S. mortgage lender, rose 10 percent on the New York Stock Exchange on speculation Warren Buffett may be interested in buying some of its units.

Countrywide climbed $1.98 to $21.79 at 4 p.m. after reaching $22.10 earlier today. The company's shares have lost almost half their value this year as waning demand for mortgages reduced profit and cut off access to funds needed to make new loans.

Buffett's Berkshire Hathaway Inc. may purchase parts of Calabasas, California-based Countrywide, the Wall Street Journal reported today, citing investors speculating on what Buffett might do with his company's $47 billion in cash. Countrywide's debt-servicing business and its investments in high-quality mortgages may be attractive to Berkshire, the newspaper said.

``Given Countrywide's prominence in the mortgage business, it must be doing something right,'' said Charles Crane, who helps manage $265 million as founder of Scotsman Capital Management in New York. Crane said speculation about Buffett is driving the company's shares higher today, after they dropped in seven of the past nine days.

Countrywide's market value has declined by more than $12 billion this year, to $12.6 billion. The company said last week it tapped $11.5 billion in emergency credit lines to weather the collapse of the subprime mortgage market. More than 90 home-loan companies have closed or put themselves up for sale since the start of last year, according to data compiled by Bloomberg.

Bankruptcy Speculation

Merrill Lynch & Co. analyst Kenneth Bruce on Aug. 15 raised the possibility of bankruptcy for Countrywide. Since then, some customers have gone to bank branches to get reassurance that their deposits are safe, according to KBW Inc. analyst Frederick Cannon said.

Cannon yesterday cut his rating on Countrywide to ``underperform'' on concern the company's liquidity crisis may be spreading to its bank unit.

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.

Buffett told CNBC that talk about a Countrywide takeover was speculation, the cable television network reported. Berkshire's policy is not to comment on acquisitions.

``If I were Buffett, I would look at Countrywide as well, as it dovetails nicely into other areas he is interested in,'' said Frank Betz, a partner at Carret Zane Capital Management in Warren, New Jersey, who helps manage $800 million, including Berkshire shares. Betz pointed to Clayton Homes Inc., the Maryville, Tennessee-based homebuilder Berkshire bought in 2003.

Federal Regulators

Federal regulators said their examiners have been at the company since it converted to a thrift charter in March.

``We're monitoring the situation closely,'' said William Ruberry, a spokesman at the U.S. Office of Thrift Supervision.

Ruberry said the presence of federal examiners at Countrywide isn't unusual.

``We maintain an ongoing presence at all our large institutions,'' he said. ``Countrywide is one of our larger institutions. That's our supervisory strategy.''

While the agency doesn't have an office at the company, regional OTS officials are visiting the lender and conducting examinations, he said. Ruberry declined to say whether the OTS has recently assigned more examiners to Countrywide.

To contact the reporters on this story: Allen Wan in New York at awan3@bloomberg.net; Alison Vekshin in Washington at avekshin@bloomberg.net.

Last Updated: August 21, 2007 16:13 EDT