In spite of tightening its underwriting standards in response to turmoil in both the subprime and Alt-A credit sectors, Countrywide Financial Corporation (NYSE:CFC) reported Monday morning that fundings at the mortgage giant jumped 10 percent in Feburary, hitting $35 billion in 2007 versus $31 billion funded in February 2006. Applications also rose, the company said, with average daily application volume in Feburary 2007 jumping 20 percent versus year-ago levels and reaching $3.0 billion. In spite of its growth, the company's deliquencies and foreclosure levels remained elevated in February, with pending foreclosures increasing for the eighth consecutive month. February's pending foreclosures represented 0.70 percent of the company's servicing portfolio, up 49 percent from year-ago levels. Delinquencies, particularly in subprime loans, have been an area of concern for investors as of late. In its February summary, the company reported that delinquent loans, defined as any loan 30 or more days past due, represented 4.71 percent -- stable compared to January, but up 10 percent versus February 2006. Moving to limit subprime exposure Countrywide had disclosed last week in a filing with the Securities and Exchange Commission that nearly 20 percent of its subprime loans were delinquent. The company has been moving to lessen its exposure to the subprime credit sector, with subprime fundings in February dropping to their lowest level in at least a year. The company said it funded $2.6 billion in subprime loans during February, less than ten percent of its total funding volume and down from the $2.9 billion funded in January 2007. "The nonprime lending industry is currently experiencing significant volatility and instability," said David Sambol, president and COO. "In response to market factors, management has implemented changes to our origination policies to mitigate future exposure including further tightening of underwriting guidelines," he said. "Nonprime fundings were only 7 percent of total mortgage loan fundings in February and recent nonprime application volumes have declined as a result of our recent policy changes. At December 31, 2006, our nonprime residuals amounted to $402 million, which represents 0.2 percent of the company's assets. "Management views that the long term impact of the current nonprime market dynamics is positive for both the industry and Countrywide," Sambol said, who also said the industry will benefit from the changes now taking place in subprime lending as lenders learn to more effectively manage and assess risk. For more information, visit http://www.countrywide.com.