Just because your shares have lost 80 percent of their value doesn't mean they don't still have a long way to fall. Just ask Countrywide Financial chief executive Angelo Mozilo, who today saw his company's shares take their biggest plunge in 20 years.

It all started with a New York Times story, curiously placed inside this morning's business section, about how court records show that the mortgage giant fabricated documents relating to a Pennsylvania borrower's bankruptcy case.

Countrywide's lawyer reportedly said the documents, which were letters to the homeowner demanding payments, were "recreated." The homeowner believed she was current on her mortgage payments.

The admission is particularly troubling, as Countrywide must defend its lending practices in an onslaught of similar bankruptcy cases around the country.

The report sent Countrywide shares down after the opening bell.

As the day wore on, however, the buzz among traders reached a deafening pitch. Rumor spread that the lender was just moments away from filing its own bankruptcy claims.

The shares, which had already lost 79 percent of their value last year, plummeted as much as 25 percent before the New York Stock Exchange halted trading in advance of a statement from Countrywide.

"There is no substance to the rumor that Countrywide is planning to file for bankruptcy," the statement read, "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 shares resumed trading and rebounded slightly, but investors remain unconvinced by the terse statement. Countrywide shares are still down 23 percent.

As the credit markets have tightened amid a housing slump, mortgage lenders like Countrywide have had to turn to outside help for financing. In August, Bank of America came to Countrywide's rescue with a $2 billion cash infusion.

Its preferred stock deal gives it the right to convert its shares into common stock at $18 each. Countrywide shares now trade at $5.89.