Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     As of June 30, 2007, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the Registrant’s Common Stock held by non-affiliates was $20,784,169,522 based on the closing price as reported on the New York Stock Exchange.

     As of April 4, 2008, there were 583,344,170 shares of Countrywide Financial Corporation Common Stock, $0.05 par value, outstanding.

Amendment No. 1 to

2007 Annual Report on Form 10-K/A

Table of Contents

     This Amendment No. 1 (“Amendment No. 1”) to the Annual Report on Form 10-K of Countrywide Financial Corporation (“Countrywide”, the “Company”, “we” or “us”) for the fiscal year ended December 31, 2007 (which was filed with the SEC on February 29, 2008, the “2007 Annual Report”), is being filed to include the information required in Part III (Items 10, 11, 12, 13 and 14) of the 2007 Annual Report.

     This Amendment No. 1 does not affect any other portion of the 2007 Annual Report, other than the filing of new Exhibits 31.1 and 31.2, which are being filed herewith. Additionally, except as specifically referenced herein, this Amendment No. 1 does not reflect any event occurring after February 29, 2008, the filing date of the 2007 Annual Report.

      When we refer to our fiscal year, we mean the twelve-month period ended December 31 of the stated year (for example, Fiscal 2007 is January 1, 2007 through December 31, 2007), unless specifically stated otherwise.

     The nine members of the Board of Directors of the Company, as of the date of this Form 10-K/A, are as follows:

     The executive officers of the Company, as of the date of this Form 10-K/A, selected at the annual organizational meeting of the Board of Directors held on June 13, 2007, or subsequently appointed, to serve until their successor has been elected and qualified or until their earlier resignation or removal, are as follows:

     Angelo R. Mozilo, a co-founder of the Company, has served the Company as its Chairman of the Board since March 1999 and its Chief Executive Officer since February 1998. Mr. Mozilo was President of the Company from March 2000 through December 2003 and has served in other executive capacities since the Company’s formation in March 1969.

     David Sambol joined the Company in 1985 and became a Managing Director in July 1994. He has served the Company in a number of executive positions, including most recently from April 2006 to September 2006 as Executive Managing Director, Business Segment Operations, from January 2004 to April 2006 as Executive Managing Director and Chief of Mortgage Banking and Capital Markets and from April 2003 to January 2004 as Executive Managing Director, Loan Originations and Capital Markets. Mr. Sambol is the President and Chief Operating Officer of the Company, and has served in this capacity since September 2006. Since October 2006, he has served as Chairman of the Board and Chief Executive Officer of Countrywide Home Loans, Inc., and since January 2008 he has served as Chief Executive Officer and President of Countrywide Bank, FSB.

     Kevin W. Bartlett joined the Company in 1984 and became a Managing Director in July 1991. He has served the Company in a number of executive positions, including Senior Managing Director and Chief of Secondary Markets. In September 2006, he was promoted to Executive Managing Director, Chief Investment Officer and currently holds the title of Executive Managing Director, Chief Investment Officer—Investments and Market Risk Management.

     Carlos M. Garcia joined the Company as Vice President, Finance in 1984 and was promoted to Managing Director in 1990. Mr. Garcia has served the Company in several executive positions, including Chief Financial Officer, and he currently holds the title of Executive Managing Director, Enterprise Risk Management and Governance.

     Andrew Gissinger III originally joined the Company in 1995 as Senior Vice President, Correspondent Lending Division, and left in 1997. After returning to the Company in January 2001, he served in a number of executive positions before being promoted to Senior Managing Director, Banking and Insurance Operations. He currently holds the title of Executive Managing Director, Residential Lending and Insurance. Mr. Gissinger is also President, Chief Operating Officer and Head of Mortgage Lending of Countrywide Home Loans, Inc. and Chief Operating Officer of Countrywide Bank, FSB.

     Ranjit M. Kripalani joined the Company as Executive Vice President, National Sales Manager of Countrywide Securities Corporation in 1998. He held a number of executive positions before being promoted to Managing Director and President of Countrywide Securities Corporation in 2001. He currently serves as Executive Managing Director, Capital Markets.

     Sandor E. Samuels joined the Company in 1990 as Senior Vice President, General Counsel and Secretary. He was promoted to Managing Director, Legal, General Counsel and Secretary in April 1991. He currently holds the title of Executive Managing Director, Chief Legal Officer.

     Jack W. Schakett joined the Company as Senior Vice President, Chief Operating Officer, Correspondent Lending Division of Countrywide Home Loans, Inc. in 1998. After having held a number of executive positions, Mr. Schakett was promoted to Managing Director & Chief Operating Officer, Institutional Mortgage Services Group in 2002. He currently serves as Executive Managing Director, Chief Operations Officer.

     Eric P. Sieracki joined the Company in 1988 as Senior Vice President of Countrywide Asset Management Corp. In 1996, after holding several executive positions at the Company, he was promoted to Managing Director, and in 2002 he was promoted to Senior Managing Director. In April 2005, he was promoted to Executive Managing Director and Chief Financial Officer.

     Robert V. James joined the Company in 2004 as Managing Director, President and Chief Operating Officer of Balboa Insurance Group, Inc., the umbrella organization that encompasses the insurance business segment of the Company. He was promoted to Senior Managing Director of the Company in January 2005, and currently holds the title of Senior Managing Director, President and Chief Executive Officer, Countrywide Insurance Group. Prior to joining the Company, Mr. James served as Executive Vice President of U.S. Insurance Operations for CNA Insurance Companies from June 1998 to January 2004.

     Anne D. McCallion joined the Company in 1991 and has served in a number of executive positions. Ms. McCallion was promoted to Managing Director in September 1997, and, in April 2003, she was promoted to Senior Managing Director, Operations. She currently holds the title of Senior Managing Director and Deputy Chief Financial Officer.

     Laura K. Milleman joined the Company in 1989 as Budget Director. Having served in a number of executive positions, Ms. Milleman was appointed Executive Vice President and Chief Accounting Officer in July 1999. In June 2002, Ms. Milleman was promoted to Managing Director, Chief Accounting Officer. She currently holds the title of Senior Managing Director, Chief Accounting Officer.

     Section 16 of the Exchange Act requires the Company’s directors and executive officers to report their ownership of and transactions in the Company’s common stock to the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”). Copies of these Section 16 reports are also required to be supplied to the Company and such reports are available on our website at www.countrywide.com. Specific dates for filing these Section 16 reports have been established by the SEC, and the Company is required to report in this Form 10-K/A any failures of its directors and executive officers to file by the relevant due date any of these reports during Fiscal 2007.

     Based solely on its review of the copies of the Section 16 reports received by it with respect to Fiscal 2007, the Company believes that all such filing requirements were satisfied, except as described below.

     Mr. Bartlett did not timely report on Form 4 the equity portion of an incentive plan bonus received on March 15, 2007. Mr. Bartlett subsequently reported this transaction on a Form 4 filed on May 9, 2007.

     The Company has adopted a Code of Business Ethics that applies to all of the Company’s employees, officers and directors, including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The Code of Business Ethics is available on the Company’s website at www.countrywide.com and is available in print upon written request to the Company’s Secretary. The Company will disclose on its website if there are any amendments to its Code of Business Ethics or if any waivers to its Code of Business Ethics are granted to the principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions. There were no waivers of the Code of Business Ethics during Fiscal 2007.

     The Board’s committees are: Audit and Ethics Committee, Compensation Committee, Corporate Governance and Nominating Committee, Credit Committee, Finance Committee, Operations and Public Policy Committee and Special Oversight Committee.

     Under a long-standing policy of the Board, each of the Board’s committees operates under its own written charter. All committee charters are available on the Company’s website at www.countrywide.com and are available in print upon written request to the Company’s Secretary.

      The Audit and Ethics Committee currently consists of three directors: Martin R. Melone, Robert T. Parry and Keith P. Russell. During Fiscal 2007, Messrs. Melone, Parry and Russell served as members of the Audit and Ethics Committee, along with Henry G. Cisneros, who was a member of the Audit and Ethics Committee through June 13, 2007. The Board has determined that each member of the Audit and Ethics Committee meets the independence requirements of the NYSE’s listing standards and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 (“Exchange Act”).

     The Board has determined that Messrs. Melone, Parry and Russell are audit committee financial experts, as defined by Item 407 of Regulation S-K. The Board has also determined that each of the Audit and Ethics Committee members is financially literate under the NYSE’s listing standards.

     During the first quarter of 2007, when we were setting compensation for our named executive officers, our primary objectives were to motivate key leadership and compensate them for Company and individual performance. At this time, we had just completed a record-setting year in 2006, during which net income reached $2.7 billion, or 1,267% higher than our $196 million in net income for 1996. Our compensation objectives during this period of rapid growth focused on paying for performance and aligning pay with the interests of our stockholders, and we were comfortable that our overall compensation practices would ensure sufficient retention of our key leadership. We also recognized the need to attract and retain the highest level of executive talent through the payment of competitive compensation, but we also acknowledged the concerns of stockholders regarding executive compensation. As a result, in early 2007, we took the following actions:

     During the second half of 2007, unprecedented disruptions in the U.S. mortgage market and the global capital markets severely strained the housing market, mortgage lenders and other financial institutions, including Countrywide. In response, we made a number of important business and strategy changes, including accelerating the integration of our mortgage banking operations into our bank subsidiary, significantly changing our underwriting standards, implementing a management reorganization and staff reductions and obtaining a $2 billion investment by Bank of America Corporation. These disruptions ultimately resulted in significant inventory valuation adjustments, increased credit costs and retained interest impairment in 2007 and led us to report a net loss of $704 million for 2007, our first full-year net loss in more than 30 years. Consistent with our philosophy of paying for performance:

     As market and Company-specific challenges continued during the second half of 2007, we believed that it was paramount to maintain our key leadership during a time of significant change and transition. Accordingly, beginning in November 2007, we implemented a retention program to enhance our ability to retain key employees. Our retention program is described in the section “Retention Program” on page 18. Among our named executive officers, only Mr. Gissinger participated in the retention program in 2007 since he was not a named executive officer at that time. Participation for our named executive officers was postponed to allow the Compensation Committee to further consider the appropriate size and form of any retention awards to them under the program. In January 2008, Bank of America announced its planned acquisition of Countrywide. In light of the anticipated change in control, we determined that the retention of key management personnel was even more important during this period of transition, and accordingly, included the other named executive officers

in our retention program. As part of our retention program, Messrs. Sieracki, Sambol and Garcia received the following:

      Mr. Mozilo chose not to participate in the retention program.

     The Compensation Committee. Under its charter, the Compensation Committee has the sole authority to determine and approve compensation for our Chief Executive Officer and each of our other executive officers. The Compensation Committee, which is comprised solely of independent directors and provides reports to the Board of Directors, oversees our benefit and incentive plans, evaluates the performance of our executive officers, and reviews and approves our compensation programs on an annual basis. The Compensation Committee is also responsible for setting the compensation for the members of our Board of Directors and the board of directors of our subsidiary, Countrywide Bank, FSB.

     With respect to compensation for each of our named executive officers (other than Messrs. Mozilo and Sambol), the Compensation Committee, with assistance from its independent consultant (described below), reviews recommendations from Mr. Sambol regarding compensation targets and goals, considers each executive’s performance in light of the goals set for him or her and determines each executive’s compensation. In addition to market compensation data and other compensation analyses, the Compensation Committee is provided tally sheets to facilitate its final decisions.

     Role of Management in Establishing Compensation. Mr. Sambol reviews compensation data and analysis for each component of executive compensation for our named executive officers (other than with respect to his own compensation and that of Mr. Mozilo), including target levels and payout amounts for annual incentive awards. This information, including the competitive information used to support it, is typically provided by our Human Resources and Compensation and Benefits staff (sometimes with assistance from management’s compensation consultants, described below). Mr. Sambol also discusses individual performance and recommended compensation levels with other senior executives before making any final recommendations. Mr. Sambol, following consultation with Mr. Mozilo (and with support from our Human Resources management and Chief Administrative Officer), then makes recommendations to the Compensation Committee regarding each component of executive compensation for our named executive officers (other than with respect to his own compensation and that of Mr. Mozilo). No executive officer has any role in approving his or her own compensation.

     Consultant to the Compensation Committee. The Compensation Committee has the authority to retain the services of outside consultants to assist it in performing its responsibilities. In early 2006, the Compensation Committee tightened the independence standards it applied to its compensation consultants. Since its then-current consultant, Hewitt Associates LLC, also provided services to the Company, although unrelated to its services for the Compensation Committee, the Committee terminated its relationship with Hewitt. The Compensation Committee then engaged Exequity LLP as a compensation consultant. During 2007, Exequity provided data on the compensation and relative performance of peer group companies to the Compensation Committee, recommended compensation programs, made presentations on regulatory and legislative matters affecting executive compensation, provided opinions on the degree to which compensation arrangements are consistent with market practices and our objectives, and consulted on other compensation matters as needed. Exequity has only provided services to the Compensation Committee since its engagement.

      Consultant to Management. Our management has retained the services of Towers Perrin Forster & Crosby, Inc. to assist management with compensation design and analysis for our executive employees. During 2007, Towers Perrin provided market data to assist management with its benchmarking of peer group companies, responded to technical and compensation design requests and assisted with other compensation and benefit matters. In addition, during 2007 Towers Perrin interacted only with management and did not make any recommendations to the Compensation Committee or Exequity.

     Our compensation objectives consist of:

     Depending upon our particular business environment, in different years we may prioritize different objectives. For instance, during our rapid growth period, we placed primary emphasis on paying for performance and aligning pay decisions with the interests of our stockholders, comfortable that our overall compensation practices would ensure sufficient retention of our key leadership.

     Our executive compensation program consists of the following five components:

     These components are intended to work together to compensate and reward our named executive officers based upon the Company’s overall performance and each executive’s individual performance during the year. In assessing total compensation, we review each component and consider and evaluate the mix and value, including benefits and perquisites, in light of the competitive market for executive talent. We intend for a substantial portion of each named executive officer’s compensation to consist of performance-based incentive pay. As a reflection of our objective to pay for performance, we set 2007 target compensation opportunities such that performance-based incentive compensation would represent approximately 80 to 90% of the total target compensation for each of our named executive officers.

     We believe our compensation programs should achieve a mix of performance-based pay while providing competitive base salaries, benefits and post-employment compensation and benefits for retention purposes. In order to provide competitive compensation, we (1) review the compensation levels and practices of a peer group and (2) benchmark all elements of compensation for our named executive officers. (Our target positioning for each named executive officer is discussed under the caption “Summary of 2007 Compensation Actions” beginning on page 9). Generally, each element of pay is determined in large part using the target positioning set for each of the named executive officers. We also review and consider an executive officer’s potential, scope and breadth of responsibilities, recent promotions, and internal pay equity when determining certain elements of compensation such as base salary, annual incentives and equity awards, which can lead to adjustments from the benchmark data.

     Because of the unique nature of our business, there are very few companies of similar size that operate in each of our various lines of business. Accordingly, and to ensure a robust sample of data, we consider a group of diversified financial services companies that engage in one or more of our key business segments: mortgage lending, banking, and investment banking operations. We generally consider organizations with assets within a reasonable range of our own, since asset size tends to be the financial metric most closely correlated to pay practices among diversified financial companies, and is the primary financial measure provided in financial services industry compensation surveys. We also consider other size and performance measures in assessing potential peer companies, such as revenues, net income, and market capitalization.

     When reviewing pay levels at our peer companies, we gather information about executive compensation and practices using publicly available information. Since publicly available information covers a limited number of executive positions, we also review pay levels and pay practices among a group broader than our peer group of similarly-sized financial services organizations using published compensation surveys.

     The peer group we used to benchmark 2007 compensation was as follows:

     The Compensation Committee regularly reviews this group and makes any modifications necessary to ensure the group most closely resembles our competitive market for executive talent. Given the evolving business environment and our changing business, the Compensation Committee is continuing to evaluate possible changes to the peer group for 2008.

     In summarizing 2007 compensation actions, we have provided tables below that illustrate how the Compensation Committee viewed certain compensation information. The compensation information in these tables differs from and is not a substitute for the information presented in the “Summary Compensation Table” on page 24.

     We have entered into employment agreements with both Mr. Mozilo, our Chairman of the Board and Chief Executive Officer, and Mr. Sambol, our President and Chief Operating Officer, that cover fiscal years 2007 through 2009. We do not have employment agreements with any other officer of the Company.

     As we discussed in our 2007 proxy statement, in December 2006 we entered into a new employment agreement with Mr. Mozilo to secure his continued services as our Chief Executive Officer. Mr. Mozilo planned on retiring at the expiration of his prior agreement in December 2006, but our Board of Directors believed it was in our best interests for Mr. Mozilo to continue to serve as our Chief Executive Officer for an additional three year term.

     During our period of significant growth prior to 2007, we targeted Mr. Mozilo’s base salary, annual incentives and long-term performance awards at or above the 90th percentile of compensation for similar executives in our peer group. We chose this position based on Mr. Mozilo’s status, knowledge and reputation as a top leader in the industry as well as his contributions to creating stockholder value over his tenure with us. Under the terms of Mr. Mozilo’s new employment agreement, we reduced the targets for Mr. Mozilo’s base salary, annual incentive awards and equity awards so that if he achieved the specified target performance levels, he would be compensated at approximately the 75th percentile of compensation for similar executives in our peer group.

     The table below sets forth amounts for the following elements of Mr. Mozilo’s 2006 actual and 2007 target and actual compensation. All of Mr. Mozilo’s 2007 compensation was paid pursuant to the terms of his employment agreement.

     2007 Base Salary. Mr. Mozilo’s base salary was $1.9 million (a reduction of $1 million from 2006).

     2007 Annual Incentive Award. In prior years, Mr. Mozilo’s cash bonus pursuant to his employment agreement was determined by adjusting his previous year incentive by the year-over-year percentage change in the Company’s diluted earnings per share (“EPS”), and the formula for his annual incentive award did not contain target or maximum payout levels. Under the terms of Mr. Mozilo’s new employment agreement, his annual incentive award for 2007 was targeted at $4 million and capped at $10 million. The incentive award is determined by our corporate return on equity, which is net income divided by stockholders’ equity (“ROE”), as shown in the table below. ROE is a measure of performance commonly used by stockholders, analysts and our management to assess the overall effectiveness and success of financial service institutions and an incentive plan measure used by a number of our competitors. We believe ROE, in combination with net income, is an appropriate assessment of our overall profitability and our efficiency in generating earnings.

     Mr. Mozilo did not earn an annual incentive award for Fiscal 2007 because the Company’s ROE fell below the threshold level.

     2007 Annual Equity Award. The grant date fair value of Mr. Mozilo’s annual equity award was $10 million. We granted half of this value in SARs that time-vest ratably over three years, and we granted the other half in RSUs that vest ratably over three years, so long as the Company achieves a 12% ROE threshold for the associated fiscal year. Because the Company’s ROE was below the 12% ROE threshold in 2007, one-third of Mr. Mozilo’s 2007 RSU grant was forfeited.

     2007 Special Term Extension Award. We made a one-time award of RSUs to Mr. Mozilo having a grant date fair value of $10 million in consideration for Mr. Mozilo postponing his retirement and extending his term as Chief Executive Officer beyond December 31, 2006. One half of these RSUs would vest on December 16, 2009 if Mr. Mozilo remains continuously employed by the Company through this date. The other half of these RSUs would vest if Mr. Mozilo remains continuously employed through December 16, 2009, but only if (1) our total stockholder return exceeds the 50^th percentile of total stockholder return performance of the S&P Financial Services Index over the period from January 1, 2007 through December 31, 2009 and (2) Mr. Mozilo remains continuously employed with the Company through the vesting date.

     In March 2007, we entered into a new employment agreement with Mr. Sambol to reflect his promotion to President and Chief Operating Officer. Mr. Sambol’s new employment agreement was negotiated on behalf of the Company by Mr. Mozilo and the Compensation Committee. In 2006, Towers Perrin conducted a pay study of peer companies for the Company that assessed appropriate pay positioning for Mr. Sambol given his new role and developed preliminary recommendations based on that information. Following additional negotiations, the Compensation Committee approved the terms of Mr. Sambol’s compensation package and the agreement was endorsed by the Board. The peer group used by the Compensation Committee while negotiating Mr. Sambol’s new employment agreement was identical to the peer group disclosed on page 9.

     Similar to Mr. Mozilo, we historically targeted Mr. Sambol’s total compensation at the 75^th to 90^th percentile of compensation for similar executives in our peer group. In Mr. Sambol’s new employment agreement, we reduced the target positioning for each of his compensation elements to the 75^th percentile of compensation for similar executives in our peer group. Despite this reduction in target positioning, Mr. Sambol received increases in his target compensation as a result of benchmarking to his new role as President and Chief Operating Officer.

     The table below sets forth amounts for the following elements of Mr. Sambol’s 2006 actual and 2007 target and actual compensation. All of Mr. Sambol’s 2007 compensation was paid pursuant to the terms of his employment agreement.

     In addition to the compensation that Mr. Sambol received in 2007, he also participated in our retention program in January 2008 described in the section “Retention Program” on page 18.

     2007 Base Salary. Mr. Sambol’s base salary was $1.4 million per year, an increase of $200,000 per year over his salary as Executive Managing Director, Business Segment Operations.

     2007 Annual Incentive Award. For 2007, the target value of Mr. Sambol’s annual incentive award of $3.9 million was set at the 75^th percentile of the compensation for similar executives in our peer group. The maximum award he was eligible to receive was $6.3 million. Mr. Sambol’s annual incentive award is based on ROE as shown in the following table.

     In addition, for 2007, if the Company’s EPS was equal to or greater than $4.30 per share, then Mr. Sambol’s annual incentive award would have been the greater of $5.25 million or the amount determined according to the table above. Mr. Sambol did not earn an annual incentive award for Fiscal 2007 because the Company’s ROE fell below the threshold target.

     2007 Annual Equity Award. For 2007, Mr. Sambol’s annual equity award had a grant date fair value of $9 million. Half of this value was granted in SARs time-vesting ratably over three years and the other half of the award was granted in RSUs that vest ratably over three years if the 12% ROE threshold is met for the associated fiscal year. Because the Company’s ROE fell below the threshold level in 2007, one-third of the 2007 RSU grant has been forfeited.

     Special Cash Bonus. Pursuant to the terms of his employment agreement, Mr. Sambol received a special cash bonus of $2.6 million in 2007. The Compensation Committee determined that, with the departure of Mr. Sambol’s predecessor, Mr. Sambol spent a considerable portion of 2006 fulfilling the additional responsibilities of President and Chief Operating Officer, while his 2006 incentive plan targets were calibrated to compensate him under his prior role as Executive Managing Director, Business Segment

Operations. This special cash bonus was intended to compensate Mr. Sambol for the difference between what he would have earned in 2006 under the incentive plan as President and Chief Operating Officer versus what he earned in 2006 under the incentive plan in his prior role.

     We target each element of compensation for Messrs. Sieracki, Garcia and Gissinger (who we sometimes refer to in this CD&A as the “other named executive officers”) between the 50^th and 75^th percentiles of compensation for similar executives in our peer group. We also review and consider their potential, the scope and breadth of their responsibilities, their recent promotions, and internal pay equity when determining certain elements of compensation such as base salary, annual incentives, and equity awards. While benchmarking and target positioning offer guidance on relative levels and ranges of compensation that may be appropriate for a particular executive, the individual’s specific performance and expected contributions are also important.

     The tables below summarize amounts for 2006 actual and 2007 target and actual compensation for each of the other named executive officers.

     In addition to the compensation that Messrs. Sieracki and Garcia received in 2007, they also participated in our retention program in January 2008 described in the section “Retention Program” on page 18. Mr. Gissinger participated in the initial phase of our retention program in November 2007.

     Total target direct compensation for each of Mr. Sieracki and Mr. Gissinger increased 35% for 2007, as illustrated in the tables above, although actual compensation fell below target as a result of Company performance falling below threshold level. The target compensation increase for Mr. Sieracki reflected his increased role upon the departure of our former President and Chief Operating Officer, and was intended to position his target compensation more closely with other chief financial officers within our peer group. Mr. Gissinger’s target compensation increase reflected his increased role in managing our mortgage lending operations.

     2007 Base Salary. For Messrs. Sieracki, Garcia and Gissinger, Mr. Sambol recommends base salaries to the Compensation Committee in connection with annual performance reviews. The Compensation Committee typically reviews and approves salary increases at a meeting in the first quarter, with increases effective June 1. Salary changes are based upon the executive’s then-current salary, competitive market factors in our peer group, the scope of the executive’s responsibilities, Company performance, the executive’s performance and the executive’s length of service in the position.

     In June 2007, we increased the salaries of our other named executive officers by approximately 4%, except for Mr. Gissinger who received a 15% increase due to his enhanced role in overseeing our mortgage lending operations. The 4% increase was consistent with the 2007 annual budget for our non-executive employees. When we set target compensation for 2007 in the first quarter, we believed any additional compensation should be performance-based and, therefore, “at-risk.”

     2007 Annual Incentive Awards. Annual incentive awards in the form of cash bonuses to all of our named executive officers are made pursuant to a stockholder-approved Annual Incentive Plan (though a portion of Mr. Mozilo’s award may be made pursuant to our Supplemental Annual Incentive Plan) and each award is subject to certain performance criteria. Under special circumstances we may elect to pay a portion of the annual incentive award in restricted stock to assist with retention of our executives. Annual incentive awards are paid after fiscal year-end results are finalized and after the Compensation Committee approves the Company’s performance and the named executive officer’s achievement of his individual goals and objectives.

     Performance measures for annual incentive awards made to Messrs. Sieracki, Garcia and Gissinger are based on the Company’s EPS performance. EPS is another performance measure used widely in our industry and, we believe, is a readily available and transparent measure for both the executives who participate in this plan as well as our stockholders. In 2006, Mr. Garcia’s and Mr. Gissinger’s annual incentives were based on a combination of EPS and business unit goals. Due to management changes in 2006, these executives gained broader organization-wide responsibilities, and consequently we modified their 2007 annual bonus framework to emphasize EPS rather than business unit performance. The formulas for the annual incentive awards are recommended by Mr. Sambol upon consultation with Mr. Mozilo and are then approved by the Compensation Committee. When Mr. Sambol makes performance recommendations to the Compensation Committee for its approval, he does so with the belief that achievement of all goals will be:

     The calibration of our Annual Incentive Plan payout structure was changed in 2007 to reflect the difficulty in repeating our record performance in 2006. The 2007 structure required a lower threshold of performance to achieve an annual incentive payment, but the annual incentive payment upon achievement of threshold performance was significantly lower. Better performance was required to achieve the maximum award. We kept the target the same, while expecting it would be more difficult to achieve that level again. The change to the overall pay-for-performance relationship and the range was intended to motivate our executives to achieve superior performance while maintaining ongoing engagement and focus if results fell below expectations.

     In addition to corporate EPS performance, we have developed a talent management index as a means to measure our enterprise-wide progress to attract, select, manage and retain talent and a governance index in support of our organization-wide governance structure. An executive’s annual incentive earned through the EPS formula can be reduced by up to 10% for failure to achieve each of these two metrics. The talent management and government indices did not influence 2007 annual incentive compensation, as no annual incentive awards were received for 2007.

     The annual incentive targets and awards for the other named executive officers in 2007 were as follows:

     2007 Annual Equity Awards. Equity incentive awards to our named executive officers are made pursuant to our stockholder-approved 2000 Equity Incentive Plan and our 2006 Equity Incentive Plan. Our equity incentive compensation is intended to ensure the retention of our executives throughout the vesting period and term of the award. In addition, our equity plans are designed to promote a performance-based culture and align the interests of our executives with those of our stockholders through equity ownership.

     The Compensation Committee annually reviews our equity plans and programs to consider which equity award vehicles will meet our objectives and create the most efficient long-term incentives, taking into account stockholder dilution, the rate at which we issue equity under our plans, tax impact of awards for the Company and the named executive officer, risk/reward profile of the named executive officer’s total compensation package, total expense, compensation practices among our peer group, and perceived value of the rewards. In determining the appropriate level of equity compensation for a named executive officer, we determine the appropriate dollar amount of equity compensation and then convert that value into a specific number of shares, units, options, or SARs, as applicable, based on the fair market value of our common stock on the date of grant. Using this methodology, equity compensation has been a key element in achieving our targeted pay objectives.

     Mr. Sambol recommended annual equity awards for each of the named executive officers (other than himself and Mr. Mozilo) to the Compensation Committee. The 2007 annual equity grants to Messrs. Sieracki, Garcia and Gissinger were determined based on individual executive performance and competitive considerations — namely, achieving our targeted positioning of 50^th to 75^th percentile of compensation for similar executives in our peer group. Equity awards for Messrs. Mozilo and Sambol are made pursuant to their employment agreements.

     In 2006, our entire annual equity grant was awarded in the form of SARs. In 2007, we altered our equity mix to 50% time-vested SARs and 50% performance-based RSUs. This change was made for two primary reasons: (1) we believed that the mix of equity awards granted to Messrs. Mozilo and Sambol and the other named executive officers should be consistent and should support the same prospective performance and retention objectives, and (2) we believed there was a demonstrable need to balance the upside potential of SARs with the retention benefits associated with RSUs. In addition, because our RSUs are performance-based (given the minimum ROE vesting requirement), they further support our executive compensation program’s pay-for-performance orientation. The 2007 SAR grant vests in equal installments over three years. These SARs are stock-settled and allow the holder to receive an amount of our common stock on the exercise date equal to the appreciation in the value of the common stock since the date of grant. The Compensation Committee decided to issue SARs rather than stock options because SARs accomplish the same compensation objectives as stock options, but are less dilutive than options. The 2007 RSUs vest in equal installments over three years if our ROE exceeds 12% in each year and the executive is still employed by the Company at the time of vesting. If the annual performance goal is not met, the RSUs are forfeited. Our ROE for 2007 was below the 12% threshold. Consequently, Messrs. Sieracki, Garcia and Gissinger each forfeited the portion of the 2007 RSU grant that was scheduled to vest on April 1, 2008.

     2007 Special Awards. In recognition of Mr. Sieracki taking on additional responsibilities in 2006 following the departure of our former President and Chief Operating Officer, the Compensation Committee awarded him an additional grant of performance-based RSUs with a grant date value of $750,000. This award carries the same terms and conditions as described above. In addition, the value of the award was intended to bring Mr. Sieracki’s total annual compensation more in line with compensation provided to other chief financial officers within our peer group and to recognize his performance after the departure of our former President and Chief Operating Officer. Because Company performance in 2007 was below threshold level, Mr. Sieracki forfeited the portion of the RSUs that was scheduled to vest on April 1, 2008.

     As discussed below, in November 2007, Mr. Gissinger participated in our retention program in which he received (1) a special grant of cash-settled RSUs with a grant date fair value of $2.1 million and which vest 50% after the first anniversary and 25% after each of the second and third anniversaries, and (2) the right to a cash retention payment in the amount of $1.3 million, so long as he remained employed by the Company until March 14, 2008. Since Mr. Gissinger remained employed by the Company through this date, he received the cash retention payment on March 14, 2008. Mr. Gissinger participated in the initial phase of the retention program because at the time of the adoption of the program he was not a named executive officer.

     We believe that offering our named executive officers certain benefits and perquisites facilitates the operation of our business and assists us in recruiting and retaining key executives. We believe the benefits to us of providing these benefits and perquisites outweigh their costs. We also believe that the benefits and perquisites offered to our named executive officers are generally consistent with practices among companies in our peer group, as well as large companies within broader industry segments. It is our intention to periodically assess our business needs and evolving compensation practices to ensure that our benefit and perquisite offerings are competitive and in the best interests of our stockholders. During 2006, we conducted, with Compensation Committee oversight, a thorough review of executive benefits and perquisites, taking into account the practices of our peer group. In 2006 and 2007, a number of changes to our benefit and perquisite program were implemented to better align with current and evolving practices.

     The table below summarizes our key benefit and perquisite programs for our named executive officers, and additional detail can be found in the Summary Compensation Table on page 24:

      Retirement Benefits

     We believe that our retirement benefits serve an important role in the retention of our named executive officers. Each of our retirement benefit plans has been designed to be consistent with practices among our peer group. The Compensation Committee regularly evaluates the competitiveness and cost of our plans to ensure that they are consistent with current market practices. Due to recent changes in market practices, we are currently transitioning from defined benefit to defined contribution plans; none of our defined benefit plans are available to newly-hired executives. Each of our named executive officers participates in one or more of a number of our supplemental programs. The table below describes the retirement benefits that we currently offer.

     Some of our named executive officers also participate in retirement benefit plans that are no longer open to new participants.

     Enhanced SERP (Mozilo only). As part of Mr. Mozilo’s employment agreement with us, we have agreed to provide Mr. Mozilo with an enhanced retirement benefit under the SERP. Mr. Mozilo’s enhanced SERP benefit is generally governed by the terms of the regular SERP, with certain important exceptions. For example, in all cases other than following termination of Mr. Mozilo’s employment by the Company for cause, Mr. Mozilo’s enhanced SERP benefit is measured in terms of both his base salary and his annual incentive awards. In contrast, benefits under the regular SERP are based solely on base salary. In order to manage the potential cost of Mr. Mozilo’s enhanced SERP, his enhanced SERP benefit cannot exceed an amount equal to $3.0 million per year, less certain offsets. Mr. Mozilo is currently entitled to receive payments under the SERP of $2.1 million annually. During 2007, this $2.1 million payment was automatically deferred to optimize the amount of his annual compensation that we can deduct for Internal Revenue Code §162(m) purposes.

     With the exception of Messrs. Mozilo and Sambol, who are entitled to severance payments under their employment agreements, we do not have special executive agreements or programs for severance benefits for any named executive officers other than what is provided by:

     A description of the potential payments to each of our named executive officers triggered upon termination or a change in control, can be found in the “Potential Payments Upon Termination or Change in Control” section on page 41.

     Reflecting our belief that stability in the roles of Chief Executive Officer and President and Chief Operating Officer is vital to the long-term success of our business, the employment agreements for Messrs. Mozilo and Sambol provide for severance payments upon termination of their employment in certain circumstances.

     Pursuant to a January 2008 letter agreement with the Company, Mr. Mozilo agreed to waive his right to receive any cash severance and pro rata bonus payments under his employment agreement upon a termination of his employment by him for any reason or by the Company without “cause” (as “cause” is defined in his employment agreement) following completion of the anticipated acquisition by Bank of America. Such severance payments would have equaled approximately $36.4 million. In addition, effective upon completion of the Bank of America acquisition, Mr. Mozilo agreed to terminate his consulting agreement with the Company and waive his right to receive consulting fees totaling $400,000 per year, as well as certain benefits and perquisites (such as use of the corporate airplane, access to office and secretarial support, financial consulting services and the payment of country club dues).

     Messrs. Sieracki, Garcia and Gissinger are each participants in our Change in Control Severance Plan. We implemented our Change in Control Severance Plan in recognition of the importance to us and our stockholders of avoiding the distraction and potential loss of key management personnel in the event of a rumored or actual change in control transaction. We adopted our Change in Control Severance Plan in September 1996 to deliver typical market competitive benefits to all employees, including our executive officers. The Change in Control Severance Plan, which we have modified from time-to-time, provides severance payments based on a multiple of salary and bonus, and certain other benefits (including health and welfare continuation) for each of our employees who is a participant in the plan and who separates from employment with the Company under certain circumstances following a change in control (as defined in the Change in Control Severance Plan).

     In 2006, our Compensation Committee conducted a review of the Change in Control Severance Plan. The Compensation Committee retained Hewitt Associates to assess the design of the program and Lehman Brothers to advise on the appropriate definitional trigger for the change in control severance protections. While the analysis showed that the basic design of the change-in-control plan as it applied to the named executive officers was generally consistent with market practices, Hewitt recommended some adjustments to the plan.

     Accordingly, based on a recommendation by the Compensation Committee, the Board of Directors made several minor changes to the plan. Aside from these minor changes, the Board affirmed the basic design of the then-existing change-in-control plan in recognition of the continuing importance to us and our stockholders of avoiding the distraction and potential loss of key management personnel and other employees in the event of a rumored or actual change in control transaction.

     Retention Program

     During the second half of 2007, our stock price declined to levels below the exercise prices for our 2004, 2005 and 2006 annual stock option and SAR grants, which severely limited the incentive value of equity awards as our primary retention vehicle. As a result of this stock price decline and the uncertainty in our business environment, we believed we were at risk of losing key employees, and in fact, by the second half of 2007, a number of key employees had resigned or were actively being recruited by other companies. In response, the Compensation Committee implemented a broad-based retention program in November 2007 to motivate and retain our key talent. The initial phase of the program excluded the named executive officers listed in our 2007 proxy statement (Mr. Gissinger participated in the initial phase of the retention program because at the time he was not a named executive officer). Although the original intent was to include the

named executive officers in the program, the Compensation Committee wanted additional time to consider the appropriate size and form of the awards made to those individuals. The design of the program was intended to balance a number of objectives, including stock use commitments to stockholders, available shares in the equity incentive plans, accounting treatment (especially the accounting impact of using cash-settled RSUs) and overall cost considerations.

     In January 2008, the Compensation Committee expanded the retention program to make the following benefits available to our named executive officers, other than Mr. Mozilo, who chose not to participate in the program:

     Under our retention program, the named executive officers received the following retention awards:

     In March 2008, the Compensation Committee determined the 2008 total target direct compensation for Messrs. Sieracki, Garcia and Gissinger. The 2008 base salary and equity-based awards for Messrs. Sieracki, Garcia and Gissinger remain unchanged from 2007 amounts. The 2008 target bonus amounts for Messrs. Sieracki, Garcia and Gissinger were set at $673,750, $1.8 million and $1.5 million, respectively, which constitute reductions of 55.1%, 39.1% and 42%, respectively, from their 2007 target bonus amounts. In 2008, the Compensation Committee will consider, in its discretion, the following performance objectives when determining the actual bonuses for Messrs. Sieracki, Garcia and Gissinger: operational objectives prior to completion of the planned acquisition by Bank of America, merger transition objectives, productivity, expense management and key employee retention. The Compensation Committee may also consider other objectives or criteria specific to each individual. Other than as noted below, the 2008 compensation levels and annual incentive awards for Messrs. Mozilo and Sambol remained unchanged from 2007 and are in accordance with the provisions of their employment agreements.

     The 2008 annual equity awards for Messrs. Sieracki, Garcia, and Gissinger were made pursuant to our 2006 Equity Incentive Plan and were cash-settled RSUs that vest in equal installments over three years instead of the SARs and performance-based RSUs granted in 2007. The Compensation Committee made this change to further enhance retention and since our stockholder-approved stock plans limit the number of shares available for employee equity awards granted under those plans. The remaining changes described above were made with the expectation of a continually challenging business environment during 2008.

     Additionally, as we previously reported in an SEC filing, we amended the terms of Mr. Sambol’s 2008 annual equity award that was provided pursuant to his employment agreement. Under the terms of the amendment, on April 1, 2008 Mr. Sambol received a performance-based RSU award with a grant date value of no less than $9.0 million instead of receiving (1) a performance-based RSU award with a grant date value of no less than $4.5 million and (2) time-vested SAR with a grant date value of no less than $4.5 million.

     The Compensation Committee usually considers and approves equity awards in the first quarter of each year at regular or telephonic meetings. Since 2004, the grant date for the awards has been the first business day in April. In addition, the Compensation Committee has delegated to the Company’s Administrative Committee the authority to grant ad hoc awards for employees other than our executive officers from an equity pool previously authorized by the Compensation Committee. In general, the grant date for ad hoc awards is either (1) the first business day of the month following the month in which a new employee is hired or the decision to make the award was otherwise made or (2) if a new employee is hired on the first business day of the month, the date the new employee is hired. All ad hoc awards are reported to the Compensation Committee at the next regular meeting. In no case will an ad hoc award for a newly hired employee be effective prior to the recipient’s effective date of employment.

     Once each equity grant has been approved by the Compensation Committee, the award’s exercise price is determined under the methodology approved by the Compensation Committee and must be equal to the fair market value of the Company’s common stock on the grant date. Effective January 1, 2007, the fair market value of our common stock has been computed by using the closing market price of the common stock on the effective date of the award. It had previously been based on an average of the high and low prices on the effective date of the award and was changed to better conform to the SEC’s proxy disclosure rules.

     In 2006, the Compensation Committee established stock ownership guidelines for our executive officers. These guidelines are designed to encourage our executives to hold a meaningful amount of our common stock and align their interests with those of our stockholders. The ownership guidelines are based on job title and, for each title, the recommended level of ownership is either (1) a fixed share amount or (2) a multiple of salary, whichever is lower. If multiple titles are held, the ownership guideline is the higher of the two. Shares that count toward satisfying the guideline include shares held outright, shares held in benefit plans and stock equivalents such as deferred compensation payable in stock. Executives are encouraged to comply with the guidelines within five years of their adoption (by 2011) or within five years of becoming an executive officer.

     The table below summarizes each named executive officer’s progress toward compliance with the fixed share guidelines as of April 4, 2008. The multiple of salary guidelines have been omitted from the table because they are currently higher than the fixed share guidelines. Messrs. Mozilo, Sieracki and Garcia have each surpassed his respective guideline.

     We generally intend for our compensation programs to provide compensation that is tax deductible to the Company, but we recognize that the best interests of the Company and its stockholders may at times be better served by compensation arrangements that are not tax deductible. Our stockholder-approved Annual Incentive Plan is designed and administered to qualify compensation awarded thereunder as “performance-based,” and therefore fully deductible pursuant to Section 162(m) of the Internal Revenue Code. Our 2000 and 2006 Equity Incentive Plans are also stockholder-approved, and in 2007 we began to award RSUs under those plans that are also intended to qualify for full deductibility under Section 162(m).

      In accordance with their employment agreements, Messrs. Mozilo and Sambol must defer certain amounts of their compensation that otherwise would not be currently deductible under Section 162(m). The compensation is deferred until such time as the limitations of Section 162(m) for Mr. Mozilo or Mr. Sambol no longer apply.

      In March 2007, the Compensation Committee approved a Supplemental Annual Incentive Plan. The plan was created to provide for payment of any annual incentive award earned by Mr. Mozilo in excess of $8 million (the limit under the Annual Incentive Plan). Any payment made under the Supplemental Annual Incentive Plan is not deductible under Section 162(m) and would be deferred until the limits of Section 162(m) no longer apply to Mr. Mozilo. In addition, the 2008 bonus program previously discussed was not established under our stockholder-approved Annual Incentive Plan, and therefore any awards earned under the 2008 bonus program would not qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code.

     Statement of Financial Accounting Standards No. 123R (revised 2004), Accounting for Share-Based Payment, requires a charge to compensation expense for the fair value of equity compensation awards. Grants of stock options, SARs, RSUs, and restricted shares under the Company’s 2000 and 2006 Equity Incentive Plans are accounted for under FAS 123R. The Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to Countrywide’s equity award programs.

     Internal Revenue Code Section 409A requires nonqualified deferred compensation programs, such as Countrywide’s deferred compensation plans, to meet certain requirements regarding risk of forfeiture and election and distribution timing. The Internal Revenue Service previously issued proposed regulations regarding the application of Section 409A and companies were expected to comply in “good faith” with the proposed regulations. The Company and the Compensation Committee worked during 2007 to review the final regulations and consider the impact of the changes. While the affected plans have been operating under “good faith” compliance, the deadline for compliance with the final regulations has been postponed to December 31, 2008. In late 2007, the Company implemented transitional relief provisions that allowed participants to accelerate the distribution of their 2007 Plan Year incentive deferrals under the Executive Deferred Compensation Plan to within two weeks of their deferral. Mr. Sambol is the only named executive officer who elected to take advantage of this distribution acceleration.

     The Compensation Committee of the Company’s Board of Directors has reviewed and discussed the foregoing Compensation Discussion and Analysis section of this Form 10-K/A with the Company’s management. Based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis section be included in this Form 10-K/A.

     During Fiscal 2007, the following individuals served as members of the Compensation Committee: Harley W. Snyder, Robert J. Donato, and Oscar P. Robertson. Michael E. Dougherty and Henry G. Cisneros served as members of the Compensation Committee until their separation from the Board on June 13, 2007 and October 18, 2007, respectively. None of the foregoing individuals has ever served as an officer or employee of the Company or any of its subsidiaries. No executive officer of the Company has served as a director or member of the compensation committee of another entity at which an executive officer of such entity is also a director of the Company.

     The “Summary Compensation Table” below summarizes the compensation of the named executive officers for Fiscal 2007 and Fiscal 2006.

     We have entered into employment agreements with each of Messrs. Mozilo and Sambol as more fully described under the heading “Potential Payments Upon Termination or Change-in-Control” and under the heading “Compensation Discussion and Analysis.” We do not have employment agreements with Messrs. Sieracki, Garcia and Gissinger.

      Other than as described below, annual incentive awards in the form of cash bonuses to our named executive officers are made pursuant to a stockholder-approved Annual Incentive Plan and each award is subject to certain performance criteria. Annual incentive awards are paid after fiscal year-end results are finalized and after the Compensation Committee reviews and approves the Company’s performance and the named executive officer’s achievement of his or her individual goals and objectives. The named executive officers’ annual incentive awards for Fiscal 2007 and Fiscal 2006 are described under the heading “Compensation Discussion and Analysis” and shown in the “Summary Compensation Table” above. The threshold, target and maximum opportunities in 2007 for each named executive officer are shown in the “Grants of Plan-Based Awards” table, as applicable.

     The maximum award under our Annual Incentive Plan is $8 million. Pursuant to our employment agreement with Mr. Mozilo, his annual incentive award may exceed the plan limit. In 2007, the Compensation Committee approved the creation of a Supplemental Annual Incentive Plan so that any annual incentive awards made to Mr. Mozilo pursuant to his employment agreement in excess of the Annual Incentive Plan limit would be made pursuant to our Supplemental Annual Incentive Plan.

     We have provided additional information regarding the compensation we pay to our named executive officers and our process for granting equity awards under the heading “Compensation Discussion and Analysis.”