August 11, 2004

SACRAMENTO, CA — The California State Teachers' Retirement System, the third largest pension fund in the nation, and Countrywide Home Loans, Inc., a national leader in residential finance, have teamed up to offer an improved home loan program designed to bring home ownership within reach for more eligible California public school employees.

Although CalSTRS has long offered a successful home loan program, this is the first time the fund has teamed up with a program administrator, resulting in a streamlined process with more options for participants. Countrywide will serve as master mortgage loan servicer/loan agent and a participating lender. Details on the CalSTRS home loan program are available at www.calstrs.com or by calling the program’s toll-free number 866-384-4HLP (4457).

“Since the CalSTRS home loan program was launched in 1984, we’ve made 30,000 loans totaling more than $4 billion,” said Michelle Cunningham, CalSTRS Director of Fixed Income. “But this new, exciting program and our relationship with Countrywide’s expert staff have brought our program to new levels of excellence in the areas of customer service, loan servicing, marketing and program administration. The enhanced services will really make a difference to our membership.”

The program – which is available to employees of the state’s public schools, community colleges and county offices of education – will continue to provide favorable financing opportunities for both new home purchases and refinancing, and will ensure that funds will always be available at competitive terms for eligible low- to moderate-income borrowers. The new relationship with Countrywide also promises:

• Ease of access to lending products. The program, once limited to five lenders, will now be adding approximately 20 more lenders, with more to come in the future. The wider array of lenders means expanded access for eligible borrowers.
• New loan products. Restructured loan programs will offer multiple fixed-rate program options, including conventional loans and two different downpayment assistance programs.
• Recruiting assistance for school districts. The Home Loan Downpayment Assistance Program promises to be a powerful recruiting tool for districts, which will be able to recruit and retain quality teachers by offering affordable housing programs.
• Enhanced customer service. Program participants will be able to quickly get courteous and thorough answers to questions via the program's Web site and toll-free number.

“Countrywide is proud to be joining forces with the California State Teachers’ Retirement System on a larger scale,” said Dottie Sheppick, senior vice president of production support for Countrywide Home Loans. “We hope to help more CalSTRS members achieve the dream of homeownership or refinance their existing mortgages to lower their monthly payment, reduce the term of their loan, or to access the equity in their home.”

Countrywide will purchase eligible loans from its correspondent lenders on behalf of CalSTRS to be held as whole loans within the fund’s investment portfolio, or sold in the financial markets as mortgage-backed securities. The CalSTRS Home Loan Program will be available from several lenders throughout California who provide 30-year and 15-year fixed rate loans for the purchase and refinance of owner occupied one- to four-unit dwellings.

Lenders must be approved by the California State Teacher’s Retirement System following screening and approval by Countrywide Home Loans to participate in the Home Loan Program.

CalSTRS is the third-largest public pension fund in the United States, with a current market value of $116 billion. It provides retirement, disability and survivor benefits to California’s public school teachers from kindergarten through community college, serving more than 735,000 members and their families. For more information, visit the CalSTRS Web site at www.calstrs.com.

Countrywide Financial Corporation (NYSE: CFC) Inc., is a member of the S&P 500 and Fortune 500. Countrywide, through its subsidiaries, provides mortgage banking and diversified financial services in domestic and international markets. Mortgage banking businesses include loan production and servicing principally through Countrywide Home Loans, Inc., which originates, purchases, securitizes, sells, and services primarily prime-quality loans. The company is headquartered in Calabasas, California and has more than 30,000 employees with over 600 offices. For more information about the company, visit Countrywide’s Web site at www.countrywide.com.