Countrywide issued its operational results for the month of August and it comes as no surprise that the numbers were down. Here is a recap of their results:

• Loan fundings for the month of August totaled $34 billion, a 17% decrease from August 2006.
• Average daily mortgage application activity was $2.3 billion, a 12% decline from August 2006.
• The mortgage loan servicing portfolio grew 18 percent (from August 2006) reaching $1.5 trillion, an increase of $226 billion.
• Commercial funding volume for August 2007 was $757 million compared to $273 million in August 2006.

"Residential mortgage loan activity for the month of August reflected current mortgage market conditions," said David Sambol, President and Chief Operating Officer. "Average daily application volume was down 12 percent as compared to both July 2007 and August 2006 as a result of the continued slowdown in housing and credit tightening in the mortgage market. As a result, the pipeline of applications-in-process ended the month at $52 billion, which was down 17 percent from July 2007 and down 19 percent from August 2006.

"Adjusting to the turbulent conditions in the mortgage and credit markets, the Company has taken decisive steps since early August, which included:

• Addressing liquidity and funding needs by accelerating our plans to migrate the funding of our mortgage originations to Countrywide Bank, and our borrowing of $11.5 billion under our lines of credit. Additionally, the Company recently arranged for $12 billion in additional secured borrowing capacity through new or existing credit facilities;
  
• Materially tightening product and underwriting guidelines such that all loans the Company now originates are eligible for Fannie Mae, Freddie Mac or Ginnie Mae securitization programs, or otherwise meet Countrywide Bank's investment criteria;
  
• Taking advantage of reduced primary market competition to adjust pricing, which is expected to have a favorable impact on mortgage banking gain-on-sale margins and result in greater returns on the high- quality loans originated for our Bank's investment portfolio; and
  
• Announcing plans to reduce expenses in response to lower expectations for mortgage origination market volume. These plans include workforce reductions of up to 20 percent.

"Looking forward, the Company expects that it will be a long-term beneficiary of the current conditions and corrections in the mortgage industry, and we are confident that the actions which we have taken in response to the current environment will position us for profitable future growth and success," Sambol concluded.

Countrywide stock soared 9 percent to $18.15 on the news of the additional $12 billion in credit.