Got this from a countrywide person about there financial standing.

Countrywide Asserts Soundness of Financial Position

Countrywide is America's number one mortgage lender and has been here to serve the needs of people and business partners for nearly 40 years.  Our industry-leading strengths include:

1 - Solid Financial Performance

•·    Ranked #91 on the Fortune 500 rankings, and 70th most profitable company in the United States in the same rankings. 

•·    Equity in excess of $14 billion dollars.

•·    To-date in 2007, ahead of strategic plan objectives both in terms of volume and profitability. Countrywide's net earnings year-to-date are $919 million. In Q2 2007 alone, the company generated $485 million in net earnings. 

•·    Funded $113 billion in loans during Q2, and continued to grow market share

•·    Earnings reflect the success of our diversification efforts. In Q2:

•-   Pre-tax earnings in Mortgage Banking segment were $320 million

•-   Servicing portfolio reached $1.415 trillion (back to being #1 servicer ahead of Wells)

•-   Pre-tax earnings for the Banking segment were $129 million

•-   Pre-tax earnings for the Insurance segment were $99 million

•-   Pre-tax earnings for the Capital Markets segment were $110 million

Countrywide remains very profitable and in fact has been profitable for over 100 consecutive quarters.

2 -Ample Liquidity Cushions:

•·    As of June 30, 2007, Countrywide had $186.5 billion in net available liquidity.  In more detail:

•-   Commercial Paper:  At the Parent level (or Countrywide Financial Corporation) over 40 banks have committed to provide $11.5 billion of liquidity back-up on Countrywide's commercial paper.  The banks are all AA rated or higher:  JP Morgan, Bank of America, Citibank, Deutsche Bank, ABN AMRO, Barclays.

•-   Countrywide Home Loans (CHL) has several asset backed commercial paper programs, whereby the commercial paper is backed by collateral (or loans).   CHL has two single seller conduits that provide over 30 billion dollars of liquidity which receive the highest ST ratings from S&P and Moody's.  CHL also has over $15 billion of committed liquidity through multi-seller conduits, which means CHL provides loans to the banks and they co-mingle these assets with other companies' assets and issue commercial paper to investors. 

•-   CHL has an additional $37 billion in committed warehouse conduit and repo facilities available. 

•·    In addition to short-term liquidity, Countrywide has other longer-term funding sources such as MTNs (medium term notes), convertible bonds, of which it just issued $4 billion at very competitive market prices in May.  These are Trust preferred securities.

•·    Finally, Countrywide has an additional wallet of over $64 billion in liquidity provided by Countrywide Bank assets which are supported by consumer deposits, Federal Home Loans Bank advances and repo agreements. 

  3 -Soon To Reap Bank Charter Benefits 

•·    Plan underway to integrate Countrywide's mortgage operations into Countrywide Bank.  This affords the company the ultimate layer of protection.  Yesterday, the OTS approved the migration of CHL into Countrywide bank.  Going forward, Countrywide's loans will now fund in the bank's name.

•·    Most importantly, Countrywide will have access to the Fed's discount window giving it access to billions of dollars of available liquidity if needed.

4 -Trust of Industry Experts

(See the attached analyst reports)

•·    Both Moody's and S&P just reaffirmed their A / A1 credit ratings last week. 

•·                Merrill Lynch, in an analyst report released today said: "After Countrywide filed its 10Q last night, news reports highlighted a section of the risk section that said "the secondary market is experiencing unprecedented disruptions from reduced investor demand for mortgages."  Based upon our review...the after-market move seems to be an over-reaction and we would recommend investors to accumulate stock...."  "We think CFC has the financial strength and management acumen to succeed, and we think Monday's disclosure that it would buy retail branches from a small lender for pennies on the dollar suggests it is not overwhelmed by the secondary markets gymnastics that is wreaking havoc on weaker names."

•·                Fox Pitt Kelton today issued coverage on CFC's stock with a "Buy" rating. Here is what they said: "The Company is likely to emerge from the current housing downturn with enhanced market share and improved economics....Countrywide will continue to generate significant excess capital and Fox Pitt sees a sharp recovery in the Company's earnings in 2009."

Conclusion               While Countrywide will continue to face many challenges during this volatile period, we have the utmost confidence in our management and our employees to continue to demonstrate leadership in our industry to achieve our long-term strategic objectives.