Countrywide Financial (NYSE:CFC) shares moved up in pre-market trading after the company announced that it would be laying off employees in an attempt to weather the current mortgage market troubles. Many expect the layoffs to take place in the Full Spectrum Lending Unit that handles many of the company's subprime mortgages.

The news comes less than two weeks after the company announced that it would be expanding its staff from rival companies who were forced to close down. Now, the company reversed its feelings and has decided to cut costs as much as possible. The result may be a steep decline in earnings that many are expecting. For now, the company is staying alive with $11.4 billion that it was able to borrow in a line of credit from a consortium of 40 banks.

Meanwhile, the lender's market continues to tighten its credit requirements. Many say they are forced to raise interest rates and stop offering certain loans because mortgage investors have lost appetite in their securities, which are now considered risky. This category has grown to include the Alt-A mortgages now, which are between prime and subprime - that is, people that don't document their income and those that are buying investment properties.

Recently, Wells Fargo raised the rates on its Jumbo 30-year fixed loan to 8% from 6.8% just last week. The trend is continuing among countless other lenders that are struggling to provide investors with more secure and higher paying mortgage securities in order to regain liquidity in what has become a risky market. In the end, if these companies can weather the storm, it would pay high returns for investors now willing to take the risk!

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