WASHINGTON, D.C. — Countrywide Financial, the nation's largest mortgage lender and a major partner in the credit union mortgage arena, has tapped its $11.5 billion credit limit to ensure its funding liquidity. The $11.5 billion is provided by 40 of the world's largest banks. Housing starts have dropped back to pre-boom 1997 levels.

The mortgage shake up is roiling the stock market based on credit jitters and economists are looking at the tealeaves for any indication the Fed will drop its key rate when it next meets in October.

CUNA Chief Economist Bill Hampel appeared recently on WUSA News and said that the "extreme turmoil" would last a few more weeks but that home prices would likely stay fall for the rest of the year. Wall Street has mispriced risk in the last few years and has now rediscovered it, he said.

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