Former Mayor and U.S. Housing Secretary Henry Cisneros has resigned as a director of the nation's biggest mortgage lender, California-based Countrywide Financial Corp.

Cisneros had served on the board since 2001. He earned $358,966 as a Countrywide director in 2006, according to a company filing.

His departure was announced before Countrywide on Friday announced a $1.2 billion loss in the third quarter, triggered by the worst U.S. housing slump in more than 15 years. But because the company said it would be profitable in the fourth quarter and in 2008, its shares rose more than 32 percent Friday to close at $17.30.

In San Antonio, Cisneros, 60, is executive chairman of CityView, a company that provides financing for urban home builders.

In his resignation letter, Cisneros said he needed to put his "time and energies on putting CityView in the best position to adjust to the demands of the period ahead."

"My respect for the Countrywide board of directors and its leader, Angelo Mozilo, is unwavering," Cisneros said in a statement released by Countrywide. "Countrywide is a well-managed company, and I have enormous confidence in the leadership."

A Securities and Exchange Commission filing by Countrywide reports that the Cisneros' departure was not due to any sort of disagreement with the company, whose stock price has fallen 60 percent so far this year.

A call to Cisneros' San Antonio office for further comment was not returned Friday.

Ralph Ward, publisher of the online newsletter Boardroom Insider, said Cisneros has been feeling the heat as a Countrywide director.

"My own suspicion is that he is trying to break away from a negative and distracting situation. He's a well-respected figure, but directors on boards of companies in controversial situations receive some push-back and feedback from directors of other companies that Cisneros might serve on. They bring a negative halo to the other companies," Ward said.

Cisneros also serves on the board of Beverly Hills, Calif.-based Live Nation Inc., a public company that promotes and produces music concerts and other events. Cisneros also is on the board of the New America Alliance, a Dallas-based nonprofit organization of Latino business leaders who organize Latino wealth-building programs.

Cisneros was San Antonio mayor from 1981 to 1989 and secretary for the U.S. Housing and Urban Development Department during President Clinton's first term.

His departure from the Countrywide board has touched off a struggle over his replacement. The CtW Investment Group, which seeks Countrywide Chairman and Chief Executive Mozilo's ouster, has nominated Lynn Turner, a former Securities and Exchange Commission chief accountant, as a new outside director.

Mozilo is under an informal SEC investigation for his sales of company stock.

"Cisneros' successor must not be chosen through a closed-door process aimed at further entrenching the current CEO. The new director must come from outside the web of Mozilo's relationships and be fully prepared to guide Countrywide Financial through a change in leadership," said William Patterson, the CtW Investment Group executive director.

Cisneros' tenure on the Countrywide board coincided with the company's 2001 launch of the We House America $1 Trillion Dollar Challenge, a program to finance $1 trillion in home loans to minorities and low-to-moderate-income borrowers. Countrywide had funded around $789 billion toward that goal as of Aug. 31, according to a company statement.

Since this summer, Countrywide has been at the forefront of the economic fallout and stock volatility stemming from subprime lending to high-risk borrowers. Many homeowners have defaulted on payments, affecting the value of securities based on those mortgages.

In an interview with the San Antonio Express-News in August, Cisneros said it was too early to assign blame for the mortgage crisis.

"The board will begin that process. A very small percentage of what Countrywide did was in the category of trouble loans," Cisneros said.

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