LOS ANGELES — Shares of Countrywide Financial Corp., the nation's largest mortgage lender, sank to an all-time low yesterday as a major home builder offered a grim outlook for the industry and the Bush administration signaled it is growing more concerned about rising mortgage defaults.

KB Home reported a mammoth loss for the fourth quarter and said there are no indications the housing market is stabilizing. The head of Fannie Mae, a government-sponsored mortgage lender, predicted the housing market would weaken through 2009 and said a turnaround wasn't likely until 2010.

President Bush, meanwhile, conceded that "it's going to take a while to work through the downturn," and Treasury Secretary Henry Paulson said he is concerned about the potential for additional home defaults.

Paulson said the administration is exploring expanding a deal it brokered with mortgage lenders last fall to include relief to people who borrowed at prime, conventional rates as well as those with subprime, adjustable-rate mortgages due to reset.

Countrywide stock fell in morning trading after The New York Times reported about accusations that the company had fabricated letters submitted in a court case involving a foreclosure in Pennsylvania.

By early afternoon, the New York Stock Exchange temporarily halted trading of Countrywide shares before the company denied rumors that a bankruptcy filing was imminent.

"There is no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company," the company said.

When trading resumed, the shares rebounded somewhat, but then slid again. They finished with a decline of $2.17, or 28.4 percent, to $5.47 after falling to an all-time low of $5.05.

A rating analysis issued by Egan-Jones Ratings Co. suggested Countrywide "is severely challenged and might falter if it does not receive an infusion of at last $4 billion" within a couple weeks.

The agency said the lender will need the funding to weather a steep decline in mortgage originations and its shift to less-profitable, non-subprime lending.

Uneasy investors were hard-pressed to find reassurance elsewhere.

Los Angeles-based KB Home, one of the nation's largest builders, reported a fourth-quarter loss of $772.7 million versus a loss of $49.6 million in the year-ago period.

Its chief executive, Jeffrey Mezger, predicted that 2008 "will be another tough year."

The National Association of Realtors struck a more optimistic outlook, predicting that even though pending U.S. home sales dipped in November, it expects sales may pick up significantly in the second half of the year.

Also yesterday, Fannie Mae head Daniel Mudd warned the housing slump would drag on the U.S. economy and called on lawmakers to help borrowers facing steep mortgage payment resets.

Mudd has suggested home prices must fall by 10 percent to 12 percent from their 2005 peak before housing can rebound.