QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.118

COUNTRYWIDE FINANCIAL CORPORATION
CHANGE IN CONTROL SEVERANCE PLAN
(As Amended and Restated June 24, 2008)

        WHEREAS, the Board of Directors (the "Board") of COUNTRYWIDE FINANCIAL
CORPORATION, a Delaware corporation (the "Company"), originally adopted this
Plan on September 12, 1996, amended and restated it on February 23, 2005 and
subsequently amended and restated it on June 14, 2006, recognizing that the
threat of an unsolicited takeover or other change in control of the Company may
occur which can result in significant distractions of its personnel and disrupt
the business of the Company with respect to attracting and retaining employees
of every level because of the uncertainties inherent in such a situation; and

        WHEREAS, the Board has determined that it is essential and in the best
interests of the Company and its shareholders to be able to retain the services
of its personnel at a time when the Company is considering its strategic
alternatives, including possible change in control transactions, in order to
ensure their continued dedication and efforts without undue concern for their
personal financial and employment security.

        NOW, THEREFORE, in order to fulfill the above objectives, the following
plan has been developed and is hereby adopted.

1.     Purpose

It is the purpose of the Company, through this Plan, to provide a salary
continuation payment and certain other benefits for each of its employees who is
a Participant in the Plan and (a) who separates from service with the Company
for Good Reason or (b) whose employment with the Company is involuntarily
terminated (other than for Cause, death or an Excluded Termination), in either
case, on or after the date on which a Change in Control occurs and within the
time limits specified in Section 5.1.

It is intended that the Plan shall be a "severance pay arrangement" within the
meaning of Section 3(2)(B)(i) of ERISA, and that it shall meet the criteria for
treatment as a "severance pay plan" set forth in 29 C.F.R. §2510.3-2(b). The
Plan shall be interpreted and applied in accordance with the foregoing
intention.

2.     Contractual Right

Upon and after a Change in Control, each Participant shall have a fully vested,
nonforfeitable contractual right, enforceable against the Company, to the
benefits provided for under Section 6 of this Plan upon the occurrence of the
conditions specified in Section 5.1. Such contractual right to receive such
benefits if the conditions specified in Section 5.1 are fulfilled shall arise on
the date on which the Change in Control occurs.

3.     Duration

This Plan shall be effective as of the date the Plan is approved by the Board or
such other date as the Board shall designate in its resolution approving the
Plan. The Plan shall continue in effect until terminated in accordance with
Section 11.

4.Definitions.    For purposes of this Plan, the following definitions shall
apply:

4.1Affiliate:    "Affiliate" shall mean with respect to any person or entity,
any entity, directly or indirectly, controlled by, controlling or under common
control with such person or entity.

4.2Board:    "Board" shall mean the Board of Directors of Countrywide Financial
Corporation.

--------------------------------------------------------------------------------

4.3Cause:    "Cause" shall exist where the Participant (a) intentionally and
continually failed to perform reasonably assigned duties, (b) willfully engaged
in misconduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise, (c) engaged in a transaction in connection with the
performance of his or her duties to the Company for personal profit to himself
or herself or (d) willfully violated any law, rule or regulation in connection
with the performance of his or her duties (other than traffic violations or
similar offenses). Failure by a Participant to perform the Participant's duties
during any period of disability shall not constitute Cause.

4.4Change in Control:    A "Change in Control" shall mean the occurrence during
the term of this Plan, of any one of the following events:

(a)An acquisition (other than directly from Company) of any common stock or
other "Voting Securities" (as hereinafter defined) of Company by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), immediately
after which such Person has "Beneficial Ownership" (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of twenty five percent (25%) or
more of the then outstanding shares of Company's common stock or the combined
voting power of Company's then outstanding Voting Securities; provided, however,
in determining whether a Change in Control has occurred, Voting Securities which
are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not
constitute an acquisition which would cause a Change in Control. For purposes of
this Plan, (1) "Voting Securities" shall mean Company's outstanding voting
securities entitled to vote generally in the election of directors and (2) a
"Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit
plan (or a trust forming a part thereof) maintained by (A) the Company or
(B) any corporation or other Person of which a majority of its voting power or
its voting equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a "Subsidiary"),
(ii) the Company or any of its Subsidiaries, or (iii) any Person in connection
with a "Non-Control Transaction" (as hereinafter defined);

(b)During any period of twenty-four (24) consecutive months, the individuals who
at the beginning of such period constitute the Board (the "Incumbent Board"),
cease for any reason to constitute at least fifty percent (50%) of the members
of the Board; provided, however, that if the election, or nomination for
election by the Company's common stockholders, of any new director was approved
by a vote of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Plan, be considered as a member of the Incumbent
Board; provided, further, however, that no individual shall be considered a
member of the Incumbent Board if such individual initially assumed office as a
result of either an actual or threatened "Election Contest" (as described in
Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board (a "Proxy Contest") including by reason of any agreement intended to avoid
or settle any Election Contest or Proxy Contest; or

(c)The consummation of:

(i)A merger, consolidation or reorganization involving the Company, unless such
merger, consolidation or reorganization is a "Non-Control Transaction." A
"Non-Control Transaction" shall mean a merger, consolidation or reorganization
of the Company where:

(A)the Company's stockholders, immediately before such merger, consolidation or
reorganization, own directly or indirectly immediately following such merger,

2

--------------------------------------------------------------------------------

consolidation or reorganization, at least fifty percent (50%) of the combined
voting power of the outstanding Voting Securities of the corporation resulting
from such merger, consolidation or reorganization (the "Surviving Corporation")
in substantially the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation or reorganization;

(B)the individuals who were members of the Incumbent Board immediately prior to
the execution of the agreement providing for such merger, consolidation or
reorganization constitute at least fifty percent (50%) of the members of the
board of directors of the Surviving Corporation, or in the event that,
immediately following the consummation of such transaction, a corporation
beneficially owns, directly or indirectly, a majority of the Voting Securities
of the Surviving Corporation, the board of directors of such corporation; and

(C)no Person other than (i) the Company, (ii) any Subsidiary, (iii) any employee
benefit plan (or any trust forming a part thereof) maintained by the Company,
the Surviving Corporation, or any Subsidiary, or (iv) any Person who,
immediately prior to such merger, consolidation or reorganization had Beneficial
Ownership of twenty five percent (25%) or more of the then outstanding Voting
Securities or common stock of the Company, has Beneficial Ownership of twenty
five percent (25%) or more of the combined voting power of the Surviving
Corporation's then outstanding Voting Securities or its common stock;

(ii)A complete liquidation or dissolution of the Company; or

(iii)The sale or other disposition of all or substantially all of the assets of
the Company to any Person (other than a transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding common stock or Voting
Securities as a result of the acquisition of common stock or Voting Securities
by the Company which, by reducing the number of shares of common stock or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person; provided, however, that if a Change in
Control would occur (but for the operation of this sentence) as a result of the
acquisition of common stock or Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional common stock or Voting Securities which increases the
percentage of the then outstanding common stock or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.

4.5Committee:    "Committee" shall mean the Committee described in Section 9.

4.6Company:    "Company" shall mean Countrywide Financial Corporation and any
successor thereto, including, without limitation, any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended), partnership(s) or corporation(s) acquiring directly or indirectly all
or substantially all of the business or assets of the Company.

4.7ERISA:    "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended. References to ERISA include the valid and binding governmental
regulations, court decisions and other regulatory and judicial authority issued
or rendered thereunder.

4.8Excluded Termination:    "Excluded Termination" shall have the meaning as set
forth in Section 5.2 of this Plan.

3

--------------------------------------------------------------------------------

4.9Good Reason:    A Participant who immediately prior to a Change in Control is
a member of employee classification X (as set forth in Appendix A) shall have
"Good Reason" for terminating employment with the Company only if one or more of
the following occurs, within twenty-four months after a Change in Control,
without the Participant's express written consent:

(a)a reduction by the Company in the Participant's base salary or the
termination or reduction of award opportunities (other than equity-based
opportunities) under any bonus or incentive award plan, practice or formula in
which the Participant participates unless a comparable arrangement (embodied in
an ongoing substitute or alternative plan, practice or formula) has been made
with respect to the Participant's participation in such bonus or incentive award
plan, practice or formula; or

(b)a change in the Participant's title, position, duties or responsibilities
which represents an adverse change from his or her title, position, duties or
responsibilities as in effect immediately prior to such change; or

(c)the relocation of the office at which the Participant is principally employed
immediately prior to the Change in Control to a location more than fifty
(50) miles from the location of such office, or the Participant being required
to be based anywhere other than such office, except to the extent the
Participant was not previously assigned to a principal location and except for
required travel on the Company's business to an extent substantially consistent
with the Participant's business travel obligations at the time of the Change in
Control.

(d)Notwithstanding the foregoing, the Participant shall not have Good Reason to
terminate employment with the Company due solely to the fact that the Company
shall cease to be a public company and shall become a subsidiary of another
publicly-traded corporation, so long as the Participant retains his or her title
and retains job authorities and responsibilities consistent in all material
respects with those of the Participant's counterparts in the substantial
subsidiaries of the parent.

Notwithstanding the foregoing, no action by the Company shall give rise to Good
Reason if it results from the Participant's termination for Cause, death or an
Excluded Termination.

4.10Operating Unit:    "Operating Unit" shall mean any subsidiary, division or
other business unit of Company or any Affiliate.

4.11Participant:    "Participant" shall mean an active, full-time employee of
the Company or any of its U.S. subsidiaries who, on the date immediately
preceding the date of a Change in Control, is employed in one of the employee
classifications set forth in Appendix A. Employees of the Company who are
Executive Managing Directors and above who are covered under individual
employment agreements shall not be Participants in this Plan.

4.12Plan:    "Plan" shall mean the Countrywide Financial Corporation Change in
Control Severance Plan (As Amended and Restated June 24, 2008).

4.13Post-Transaction Good Reason:    "Post-Transaction Good Reason" shall mean,
with respect to offered employment or the continued employment, as the case may
be, to employees who immediately prior to a Change in Control are members of
employee classification X (as set forth in Appendix A) with a Post-Transaction
Employer (as defined in Section 5.2) following a Transaction (as defined in
Section 5.2):

(a)a reduction in the Participant's annual base salary or the termination or
reduction of award opportunities (other than equity-based opportunities) under
any bonus or incentive award plan, practice or formula in which the Participant
participates unless a comparable

4

--------------------------------------------------------------------------------

arrangement (embodied in an ongoing substitute or alternative plan, practice or
formula) has been made with respect to the Participant's participation in such
bonus or incentive award plan, practice or formula, in either case below the
greater of the rate in effect (i) as of the date of the Transaction or (ii) on
any date following the Transaction;

(b)a change in the Participant's title, position, duties or responsibilities
which represents an adverse change from his or her title, position, duties or
responsibilities as in effect immediately prior to such change, in any case as
determined by the Participant in good faith; or

(c)the relocation of the office at which the Participant is principally employed
immediately prior to the Transaction to a location more than fifty (50) miles
from the location of such office, or the Participant being required to be based
anywhere other than such office, except to the extent the Participant was not
previously assigned to a principal location and except for required travel on
the Company's business to an extent substantially consistent with the
Participant's business travel obligations at the time of the Transaction;

4.14Senior Human Resources Manager:    "Senior Human Resources Manager" shall
mean the Senior Human Resources Officer of the Company prior to a Change in
Control or such person's designee.

4.15Severance Benefit:    "Severance Benefit" shall mean the benefits payable in
accordance with Section 6 of this Plan.

5.     When Provisions Apply

5.1The benefits provided for under Section 6 shall be provided to each
Participant who incurs a "Qualifying Termination." For purposes of this Plan, a
"Qualifying Termination" shall occur only if a Change in Control occurs and

(a)within twenty-four months after the Change in Control occurs, the Company
terminates the Participant's employment other than for Cause; or

(b)(i)    within twenty-four months after the Change in Control occurs, Good
Reason occurs, and

(ii)the Participant terminates employment with the Company within six months
after the Good Reason occurs;

provided, however, that a Qualifying Termination shall not occur if the
Participant's employment with the Company terminates by reason of Cause, the
Participant's death, or an Excluded Termination (as defined in Section 5.2).

5.2Sale of Business or Assets.    If, following a Change in Control, a
Participant's employment with the Company and its Affiliates terminates in
connection with the sale, divestiture or other disposition of any Operating Unit
(or part thereof) (a "Transaction"), such termination shall not be a termination
of employment of the Participant for purposes of the Plan, and (notwithstanding
the rights provided to the Participant by Section 5.1) the Participant shall not
be entitled to a Severance Benefit as a result of such termination of employment
if (i) the Participant is offered continued employment, or continues in
employment, with the divested Operating Unit or the purchaser of the assets of
the Operating Unit, as the case may be, (the "Post-Transaction Employer") or
their respective Affiliates on terms and conditions that would not constitute
Post-Transaction Good Reason and (ii) the Company obtains an agreement from the
acquirer of the stock or assets of the divested Operating Unit, enforceable by
the Participant, to provide or cause the Post-Transaction Employer to provide
severance pay and benefits, if the Participant accepts the offered employment or
continues in employment with

5

--------------------------------------------------------------------------------

the Post-Transaction Employer or its Affiliates following the Transaction,
(A) at least equal to the Severance Benefit and (B) payable upon a termination
of the Participant's employment with the Post-Transaction Employer and its
Affiliates within the period described in Section 5.1 (or such part of it as is
then remaining) for any reason other than Cause, the Participant's death or a
termination by the Participant without Post-Transaction Good Reason. For
purposes of this Section 5.2, the term Cause shall have the meaning ascribed to
it in Section 4.3, but the term Company as it is used in Section 4.3 shall be
deemed to refer to the entity employing the Participant after the Transaction.

A termination of employment described in this Section 5.2 is herein referred to
as an "Excluded Termination." In the circumstances described in this
Section 5.2, the Participant shall not be entitled to receive any Severance
Benefit under this Plan whether or not the Participant accepts the offered
employment or continues in employment. The provisions of this Section 5.2 do not
create any entitlement to any Severance Benefit from the Company and its
Affiliates in any circumstances whatsoever and are to be construed solely as a
limitation on such entitlement in the circumstances herein set forth.

5.3The fact that a Participant is eligible to immediately receive retirement
benefits under the Countrywide Financial Corporation Defined Benefit Pension
Plan or any other Company employee benefit plan, practice or policy shall not
render him or her ineligible for the benefits under this Plan.

6.     Severance Benefits

6.1Severance Payment.

(a)Each Participant entitled to benefits under this Plan shall receive as
continuation of salary and bonus an amount as determined in accordance with
Appendix A (the "Salary Separation Payment") (or, if greater, the amount
determined pursuant to any individual employment, offer, letter or similar
agreement by and between the Participant and the Company (an "Individual
Agreement"), provided that notwithstanding anything to the contrary in such
Individual Agreement any amounts payable under such Individual Agreement shall
in all cases be payable in accordance with the payment schedules set forth in
this Plan), and in no event shall a Participant be entitled to duplicate
payments under the Plan and any Individual Agreement.

For purposes of calculating the Salary Separation Payment, (1) the Participant's
"Base Pay" shall be the Participant's base annual salary as of the date of his
or her termination of employment or, if greater, as of the date on which the
Change in Control occurs, (2) the Participant's "Bonus" shall be the greater of
(x) the average of the aggregate bonus and/or incentive award, if any, paid or
payable to the Participant for each of the two (2) fiscal years preceding the
fiscal year in which the Participant's termination of employment occurs (or such
fewer number of fiscal years for which the Participant was eligible to receive a
bonus and/or incentive award) and (y) the bonus and/or incentive award paid for
the fiscal year immediately preceding the date of the Change in Control, and
(3) the Participant's "Pay" for Classification C, D and E is base pay and bonus
paid for the preceding twelve months (annualized for employees who have worked
for less than twelve months) and converted to a weekly amount.

(b)Except as required by Section 7, the Salary Separation Payment provided for
in Section 6.1(a) shall be payable in addition to, and not in lieu of, all other
accrued, vested, earned, or deferred compensation rights, options, or other
benefits (other than severance pay or similar benefits) which may be payable or
owing to a Participant following termination of his or her employment under any
plan, including but not limited to

6

--------------------------------------------------------------------------------

retirement and supplemental retirement benefits, bonus, accrued vacation or sick
pay, compensation, or benefits payable under any of the Company's employee
benefit plans, practices or policies.

(c)The Salary Separation Payment shall not be offset or reduced by any
unemployment insurance benefit, payment in lieu of notice required under any law
or act, or income from subsequent employment that the Participant may receive.

(d)Except as otherwise provided by Section 6.4, the Salary Separation Payment
shall be paid in a series of substantially equal installments in accordance with
the regular payroll practices of the Company (as in effect as of the date of
termination) over the period used in computing the Salary Separation Payment
pursuant to Section 6.1(a) (the "Salary Separation Pay Period"), commencing as
soon as administratively practicable, but in no event more than sixty (60) days,
following the Participant's Qualifying Termination (except as otherwise required
by Section 16).

6.2The Salary Separation Pay Period shall be included as accredited service for
the purpose of receiving or accruing benefits under all employee benefit plans
of the Company, including, but not limited to, group health and life insurance,
long-term disability, the Countrywide Financial Corporation Defined Benefit
Pension Plan (the "Pension Plan"), the Countrywide Financial Corporation 401(k)
Savings and Investment Plan, the Countrywide Financial Corporation Supplemental
Executive Retirement Plan, the Countrywide Financial Corporation Executive
Deferred Compensation Plan, the Countrywide Financial Corporation Selected
Employee Deferred Compensation Plan and the Countrywide Capital Market
Nonqualified ERISA Pension Plan. With respect to the Pension Plan, the Company
shall pay a Participant, as soon as administratively practicable, but in no
event more than sixty (60) days, following such Participant's termination of
employment a lump sum payment equal to the present value of the difference (if
any) between the accrued benefit the Participant is entitled to receive under
the Pension Plan upon the Participant's termination of employment and the
accrued benefit the Participant would have been entitled to receive under the
Pension Plan had the Participant been credited with additional years of service
during the Salary Separation Pay Period. Such present value calculations shall
be made by the Company using the actuarial assumptions applicable under the
Pension Plan as of the date of the Participant's termination of employment.

6.3For the period equal to the Salary Separation Pay Period and commencing on
the date of Participant's termination of employment (the "Continuation Period"),
the Company shall at its expense (and without contribution by the Participant)
continue on behalf of the Participant and his or her dependents and
beneficiaries (a) medical, health, dental and prescription drug benefits,
(b) short and long-term disability coverage, (c) life insurance and other death
benefits coverage and (d) individual outplacement services for members of
employee classification X, A and B, (as set forth in Appendix A) and
outplacement services at a level to be determined by the Senior Human Resources
Manager for employee classification C, D and E. For a period of thirty-six
(36) months for members of employee classification X and A, and commencing on
the date of Participant's Qualifying Termination, the Company shall at its
expense (and without contribution by the Participant) continue, on behalf of the
Participant, financial planning, executive medical examination program and
executive long term disability. The coverages and benefits (including
deductibles, if any) provided under this Section 6.3 during the Continuation
Period shall be no less favorable in the aggregate to the Participant and his or
her beneficiaries than the most favorable of such coverages and benefits
provided the Participant and his or her dependents during the 90-day period
immediately preceding the Change in Control or as of any date following the
Change in Control but preceding the date of Participant's termination. The
obligation under this Section 6.3 with respect to the

7

--------------------------------------------------------------------------------

foregoing benefits shall be limited if the Participant obtains any such benefits
pursuant to a subsequent employer's benefit plans, in which case the Company may
reduce or eliminate the coverage and benefits it is required to provide the
Participant hereunder as long as the aggregate coverages and benefits of the
combined benefit plans are no less favorable to the Participant than the
coverages and benefits required to be provided hereunder. A Participant's
qualifying event for purposes continuation coverage under §4980B of the Internal
Revenue Code of 1986, as amended (the "Code"), will not occur until the end of
the period during which benefits were provided pursuant to this Section 6.3.
Notwithstanding anything contained in this Plan, the provision of the benefits
to be provided for pursuant to this Section 6.3 shall comply with the foregoing
provisions: any such benefits that are "deferred compensation" within the
meaning of Code Section 409A (which, for example, would not include non-taxable
medical benefits, "disability pay" or "death benefit" plans within the meaning
of Treasury Regulation Section 1.409A-1(a)(5)) shall be provided and
administered in a manner that complies with Treasury Regulation
Section 1.409A-3(i)(1)(iv), which will require that (i) the amount of such
benefits provided during one taxable year shall not affect the amount of such
benefits provided in any other taxable year, except that to the extent such
benefits consist of the reimbursement of expenses referred to in Section 105(b)
of the Code, a maximum, if provided under the terms of the plan providing such
benefit, may be imposed on the amount of such reimbursements over some or all of
the period in which such benefit is to be provided to the Participant, as
described in Treasury Regulation Section 1.409A-3(i)(iv)(B), (ii) to the extent
that any such benefits consist of reimbursement of eligible expenses, such
reimbursement must be made on or before the last day of the Participant's
taxable year following the taxable year in which the expense was incurred and
(iii) no such benefit may be liquidated or exchanged for another benefit.

6.4Notwithstanding Section 6.1, a Participant in employee classification C, D or
E (as set forth in Appendix A) may elect to receive the Salary Separation
Payment in a lump sum, but only if the Company has first determined that no
portion of the Salary Separation Payment is subject to the requirements of Code
Section 409A. Benefits otherwise receivable by the Participant pursuant to
clauses (a), (b) and (c) of Section 6.3 shall be discontinued if the Participant
requests and receives a lump sum payment. If the Participant elects to receive
the Salary Separation Payment as a lump sum, and the Participant accepts
alternative employment with the Company, such Participant shall owe the Company
the portion of the Salary Separation Payment which exceeds the amount of Base
Pay the Participant would have earned had the Participant been actively employed
by the Company from the date his or her termination of employment commenced to
the new employment commencement date. The payment of a Participant's Salary
Separation Payment as a lump sum under this Section 6.4 shall be made as soon as
administratively practicable, but in no event more than sixty (60) days,
following the Participant's Qualifying Termination.

6.5Notwithstanding Section 6.1, benefits otherwise receivable by the Participant
pursuant to clauses (a), (b) and (c) of Section 6.3 shall be discontinued if the
Participant accepts alternative employment with the Company or any of its
Affiliates. Payments under Section 6.1 shall also cease upon a Participant
accepting alternative employment with the Company or any of its Affiliates.

6.6Any termination of employment following a Change in Control by the Company or
by the Participant shall be communicated by a Notice of Termination to the other
party herein in accordance with Section 13. For purposes of this Plan, a "Notice
of Termination" shall mean a written notice which shall indicate the specific
Qualifying Termination provision in this Plan, if any, relied upon and shall set
forth in reasonable detail the facts and circumstances that provide a basis for
termination of the Participant's employment under the provision so

8

--------------------------------------------------------------------------------

indicated and shall specify the effective date of the Qualifying Termination
which shall not be less than thirty (30) days nor more than sixty (60) days from
the date such Notice of Termination is given or such shorter or longer period as
may be mutually agreed between the Company and the Participant. For purposes of
this Plan, no such purported Qualifying Termination shall be effective without
such Notice of Termination.

6.7If a Participant who is entitled to Severance Benefits under this Plan dies
before receiving the Salary Separation Payment, such Payment shall be made to
the Participant's surviving spouse, or, if there is no surviving spouse, to the
Participant's estate. If a Participant who is entitled to Severance Benefits
under this Plan dies before the end of the Continuation Period, then for the
balance of the Continuation Period, the Company shall be required to continue
the benefits provided for under Section 6.3 to the Participant's spouse and
dependents.

6.8A Participant who is entitled to benefits under this Plan shall not be
required to accept or to seek other employment as a condition of receiving such
benefits, and a Participant's benefits provided under this Plan shall not be
offset by any future compensation received by the Participant.

9

--------------------------------------------------------------------------------

7.     Excise Tax

7.1Excise Tax Limitation.

(a)With respect to any Participant who immediately prior to the Change in
Control is a member of employee classification X or A (as set forth in
Appendix A), except as provided in subsection (b), in the event it shall be
determined that any payment or distribution of any type to a Participant,
including accelerated vesting, to or for the benefit of the Participant, by the
Company, any Affiliate of the Company, any Person (as the term "person" is used
for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended) who acquires ownership or effective control of the Company or
ownership of a substantial portion of the Company's assets (within the meaning
of Section 280G of the Code, and the regulations thereunder) or any Affiliate of
such Person, whether paid or payable or distributed or distributable pursuant to
the terms of this Plan or otherwise (the "Payments"), is or will be subject to
the excise tax imposed by Section 4999 of the Code or any interest or penalties
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are collectively referred to as the "Excise Tax"), then
the Participant shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Participant of all taxes
(including any interest or penalties imposed with respect to such taxes),
including any income tax, employment tax or Excise Tax imposed upon the Gross-Up
Payment, the Participant retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.

(b)With respect to any Participant who immediately prior to the Change in
Control is a member of employee classification X or A, notwithstanding
Section (a) or any other provision of this Plan to the contrary, in the event
that the Payments (excluding the payment provided for in subsection 7.1(a))
exceed by less than 10% or $100,000 the maximum amount of Payments which if made
or provided to the Participant would not be subject to an Excise Tax, the
Participant will not be entitled to a Gross-Up Payment and the Payments shall be
reduced (but not below zero) to the extent necessary so that no Payment to be
made or benefit to be provided to the Participant shall be subject to the Excise
Tax; it being the intent of the parties that the Payments shall be reduced only
if the economic detriment to the Participant (on a pre-tax basis) is less than
the greater of $100,000 or 10% of the Payments. The Company shall reduce or
eliminate the Payments under the Plan, by first reducing or eliminating the
portion of the Payments under the Plan which are not payable in cash and then by
reducing or eliminating cash payments under the Plan, in each case in reverse
order beginning with payments or benefits which are to be paid the farthest in
time from the "Determination" (as defined below).

(c)With respect to any Participant who immediately prior to the Change in
Control is a member of employee classification X or A , the determination of
whether the Payments shall be reduced pursuant to this Plan and the amount of
such reduction, all mathematical determinations, and all determinations as to
whether any of the Payments are "parachute payments" (within the meaning of
Section 280G of the Code), that are required to be made under this Section,
including determinations as to whether a Gross-Up Payment is required, the
amount of such Gross-Up Payment and amounts relevant to the last sentence of
this subsection (c), shall be made by an independent accounting firm selected by
the Company from among the four (4) largest accounting firms in the United
States or any nationally recognized financial planning and benefits consulting
company (the "Accounting Firm"), which shall provide its determination (the
"Determination"), together with detailed supporting calculations regarding the
amount of

10

--------------------------------------------------------------------------------

any Gross-Up Payment and any other relevant matter, both to the Company and the
Participant by no later than ten (10) days following the Termination Date, if
applicable, or such earlier time as is requested by the Company or the
Participant (if the Participant reasonably believes that any of the Payments may
be subject to the Excise Tax). If the Accounting Firm determines that no Excise
Tax is payable by the Participant, it shall furnish the Participant and the
Company with an opinion reasonably acceptable to the Participant and the Company
that no Excise Tax is payable (including the reasons therefor) and that the
Participant has substantial authority not to report any Excise Tax on his
federal income tax return. If a Gross-Up Payment is determined to be payable, it
shall be paid (including through withholding of taxes) to the Participant no
later than the due date for payment of the Excise Tax. Any determination by the
Accounting Firm shall be binding upon the Company and the Participant, absent
manifest error. As a result of uncertainty in the application of Section 4999 of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments not made by the Company should
have been made ("Underpayment"), or that Gross-Up Payments will have been made
by the Company which should not have been made ("Overpayment"). In either such
event, the Accounting Firm shall determine the amount of the Underpayment or
Overpayment that has occurred. In the case of an Underpayment, the amount of
such Underpayment (together with any interest and penalties payable by the
Participant as a result of such Underpayment) shall be promptly paid by the
Company to or for the benefit of the Participant. In the case of an Overpayment,
the Participant shall, at the direction and expense of the Company, take such
steps as are reasonably necessary (including the filing of returns and claims
for refund), follow reasonable instructions from, and procedures established by,
the Company, and otherwise reasonably cooperate with the Company to correct such
Overpayment, provided, however, that (i) the Participant shall not in any event
be obligated to return to the Company an amount greater than the net after-tax
portion of the Overpayment that he has retained or has recovered as a refund
from the applicable taxing authorities and (ii) if a Gross-Up Payment is
determined to be payable, this provision shall be interpreted in a manner
consistent with an intent to make the Participant whole, on an after-tax basis,
from the application of the Excise Tax, it being understood that the correction
of an Overpayment may result in the Participant repaying to the Company an
amount which is less than the Overpayment. The cost of all such determinations
made pursuant to this Section shall be paid by the Company.

In order to ensure compliance with Section 409A of the Code, the Gross-Up
Payment shall in all events be paid no later than the end of the Participant's
taxable year next following the Participant's taxable year in which the Excise
Tax (and any income or other related taxes or interest or penalties thereon) on
a Payment are remitted to the Internal Revenue Service or any other applicable
taxing authority or, in the case of amounts relating to a claim described in
Section 7(c) that does not result in the remittance of any federal, state, local
and foreign income, excise, social security and other taxes, the calendar year
in which the claim is finally settled or otherwise resolved.

(d)With respect to any Participant who immediately prior to the Change in
Control is a member of employee classification B, C, D or E (as set forth in
Appendix A), notwithstanding anything in this Plan to the contrary, in the event
it shall be determined that any Payment to or for the benefit of a Participant
would be subject to the Excise Tax, the Payments shall be reduced (but not below
zero) if and to the extent that such reduction would result in Participant
retaining a larger amount, on an after-tax basis (taking into account federal,
state and local income taxes and the imposition of the Excise Tax), than if
Participant received all of the Payments. The Company shall reduce or

11

--------------------------------------------------------------------------------

eliminate the Payments, by first reducing or eliminating the portion of the
Payments under the Plan which are not payable in cash and then by reducing or
eliminating cash payments under the Plan and by reducing any pro rata bonus
payment, in each case in reverse order beginning with payments or benefits which
are to be paid the farthest in time from the determination. All determinations
concerning the application of this paragraph shall be made by a nationally
recognized firm of independent accountants or any nationally recognized
financial planning and benefits consulting company, selected by Participant and
satisfactory to Employer, whose determination shall be conclusive and binding on
all parties. The fees and expenses of such accountants shall be borne by
Participant.

The Company shall hold in confidence and not disclose, without the Participant's
prior written consent, any information with regard to the Participant's tax
position which the Company obtains pursuant to this Section.

Notwithstanding anything to the contrary in this Plan or otherwise or the fact
that this Plan is subject to ERISA, any determinations made by the Accounting
Firm and/or the Company with respect to the matters covered by this Section 7.1
shall be subject to de novo review.

7.2Pooling Transactions.    Notwithstanding anything contained in this Plan to
the contrary, in the event of a Change in Control which is also intended to be
treated as a "pooling of interests" under generally accepted accounting
principles (a "Pooling Transaction"), the Board shall take such actions, if any,
as are specifically recommended by an independent accounting firm retained by
the Company to the extent reasonably necessary in order to assure that the
Pooling Transaction will qualify as such, including but not limited to
(a) deferring the vesting, exercise, payment, settlement or lapsing of
restrictions with respect to any option or award, (b) providing that the payment
or settlement in respect of any option or award be made in the form of cash,
shares of common stock or securities of a successor or acquirer of the Company,
or a combination of the foregoing, (c) providing for the extension of the term
of any option or award to the extent necessary to accommodate the foregoing, but
not beyond the maximum term permitted for any option or award and (d) amending,
deleting or making inapplicable to the Participant any provision in this Plan or
other arrangement pursuant to which he or she receives compensation, payments or
benefits.

8.     Successor to Company

This Plan shall bind any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company, in the same manner and to the same extent that the
Company would be obligated under this Plan if no succession had taken place. In
the case of any transaction in which a successor would not by the foregoing
provision or by operation of law be bound by this Plan, the Company shall
require such successor expressly and unconditionally to assume and agree to
perform the Company's obligations under this Plan, in the same manner and to the
same extent that the Company would be required to perform if no such succession
had taken place. In the case any such successor fails to assume the Plan, the
rights and benefits under the Plan shall automatically become the obligation of
such successor as though such successor had expressly and unconditionally
assumed and agreed to perform the Company's obligations under this Plan.

12

--------------------------------------------------------------------------------

9.     Administration

9.1Plan Administrator.    The Plan shall be administered by a Committee
appointed from time to time by the Company. Members of the Committee may be
Participants under the Plan. Any individual serving on the Committee who is a
Participant shall not vote or act on any matter relating solely to himself or
herself.

9.2Powers and Duties of the Committee.    The Committee shall have the
discretionary authority to determine eligibility for and to construe and
interpret the terms of the Plan, including, without limitation, by supplying
omissions from, correcting deficiencies in, or resolving inconsistencies or
ambiguities in, the language of the Plan. The Committee shall have such other
discretionary authority as may be necessary to enable it to discharge its
responsibilities under the Plan, including, but not limited to, the power to:

(a)Resolve disputes concerning eligibility and participation in the Plan and the
amount of Severance Benefits available to a Participant, including the ability
to make factual determinations;

(b)Delegate responsibility for the administration of the Plan, including the
authority to review denied claims, and appoint or employ one or more persons to
assist in the administration of the Plan or to render advice with regard to any
of its responsibilities under the Plan;

(c)Adopt such rules as it deems appropriate for the administration of the Plan;

(d)Prescribe procedures to be followed by Participants;

(e)Prepare and distribute information relating to the Plan; and

(f)Request from Participants such information as shall be necessary for the
proper administration of the Plan.

The decision of the Committee or its delegate upon any matter within its
authority shall be final and binding on all parties, including the Company and
Participants.

9.3Reliance Upon Information.    In making decisions under the Plan, the
Committee and its delegates may rely upon information furnished by, or at the
request of, a Participant.

9.4Action by Committee:    The Committee may act either at a meeting (in person
or by telephone or similar means) or, in the absence of a meeting, by an
instrument in writing signed by a majority of the Committee members. The
Committee may elect one of its members as chairperson and appoint a secretary to
keep a record of all meetings and forward any necessary communication to the
Company. The Committee may adopt such bylaws for the conduct of its business as
it deems desirable. All decisions of the Committee shall be made by a majority
vote including actions taken without a meeting.

9.5Indemnity of Committee:    The Company shall indemnify and hold harmless the
members of the Committee, and any employee to whom the duties of the Committee
may be delegated, against any and all claims, losses, damages, expenses or
liabilities arising from any action or failure to act with respect to the Plan,
except in the case of willful misconduct by the Committee or any of its members
or any such employee.

10.   Claims Procedures

10.1Submitting a Claim:    A Participant or other person ("claimant") who has a
claim for Severance Benefits under the Plan must submit a written notice of such
claim to the

13

--------------------------------------------------------------------------------

Company. All such claims must be submitted within six (6) months from the date
that the claim for benefits arose.

10.2Notification of Decision:    If the claim is wholly or partially denied, the
Committee shall notify the claimant of the adverse benefit determination within
a reasonable period of time, but not later than ninety (90) days after receipt
of the claim by the Plan, unless the Committee determines that special
circumstances require an extension of time for processing the claim. If the
Committee determines that an extension of time for processing is required,
written notification of the extension shall be furnished to the claimant prior
to the termination of the initial ninety (90)-day period. In no event shall such
extension exceed a period of ninety (90) days from the end of such initial
period. The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render the
benefit determination. The notice of benefit determination shall set forth, in a
manner calculated to be understood by the claimant, the following:

(a)The specific reason or reasons for the adverse determination;

(b)Reference to the specific Plan provisions on which the determination is
based;

(c)A description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary;

(d)A description of the Plan's review procedures and the time limits applicable
to such procedures, including a statement of the claimant's right to bring a
civil action under Section 502(a) of ERISA following an adverse benefit
determination on review.

10.3Review of Denied Claim:    A claimant shall be entitled to a full and fair
review of the claim and the adverse benefit determination. The claimant shall
have sixty (60) days following receipt of a notification of an adverse benefit
determination within which to appeal the determination. The claimant shall have
the opportunity to submit written comments, documents, records and other
information relating to the claim for benefits, and shall be provided, upon
request and free of charge, reasonable access to, and copies of, all documents,
records and other information relevant to the claimant's claim for benefits. The
review shall take into account all comments, documents, records and other
information the claimant submits relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination.

10.4Decision on Review:    The Committee shall notify the claimant of its
decision on review within a reasonable period of time, but not later than sixty
(60) days after receipt of the claimant's request for review, unless the
Committee determines that special circumstances require an extension of time for
processing the claim. If the Committee determines that an extension of time for
processing the claim is required, written notice of the extension shall be
furnished to the claimant prior to the termination of the initial sixty (60)-day
period. In no event shall such extension exceed a period of sixty (60) days from
the end of the initial period. The extension notice shall indicate the special
circumstances requiring the extension of time and the date by which the
Committee expects to render the determination on review. The Committee shall
provide a claimant with written notification of the Committee's benefit
determination on review. In the case of an adverse benefit determination, the
notification shall set forth, in a manner calculated to be understood by the
claimant:

(a)The specific reason or reasons for the adverse determination;

(b)Reference to the specific Plan provisions on which the benefit determination
is based;

14

--------------------------------------------------------------------------------

(c)A statement that the claimant is entitled to receive, upon request and free
of charge, reasonable access to, and copies of, all documents, records and other
information relevant to the claimant's claim for benefits;

(d)A statement describing any voluntary appeal procedures offered by the Plan
and the claimant's right to obtain information about such procedures; and

(e)A statement of the claimant's right to bring an action under Section 502(a)
of ERISA.

10.5Legal Actions:    No legal action concerning the claim may be brought unless
and until all of the following have occurred:

(a)The claimant has submitted a proper written claim;

(b)The claimant has been notified that the claim is denied;

(c)The claimant has filed a written appeal with the Committee for review of the
denied claim; and

(d)The claimant has been notified in writing of the decision of the Committee or
the Committee has failed to take any action on the request for review within the
time prescribed above.

11.   Amendment and Plan Termination

11.1Amendment and Termination.    Prior to a Change in Control, the Plan may be
amended or modified in any respect, and may be terminated, by resolution adopted
by two-thirds of the Board; provided, however, that no such amendment,
modification or termination, which would adversely affect the benefits or
protections hereunder of any individual who is a Participant as of the date such
amendment, modification or termination is adopted shall be effective as it
relates to such individual unless no Change in Control occurs within six
(6) months after such adoption, any such attempted amendment, modification or
termination adopted within six (6) months prior to a Change in Control being
null and void ab initio as it relates to all individuals who were Participants
as of the date of such adoption; provided, further, however, that the Plan may
not be amended, modified or terminated, (a) at the request of a third party who
has indicated an intention or taken steps to effect a Change in Control and who
effectuates a Change in Control or (b) otherwise in connection with, or in
anticipation of, a Change in Control which actually occurs, if the amendment,
modification or termination adversely affects the rights of any Participant
under the Plan, any such attempted amendment, modification or termination being
null and void ab initio. From and after the occurrence of a Change in Control,
the Plan (x) may not be amended or modified in any manner that would in any way
adversely affect the benefits or protections provided to any individual
hereunder and (y) may not be terminated until the later of (i) twenty-four
(24) months after the date of the Change in Control or (ii) the date that all
Participants who have become entitled to a Severance Benefit hereunder shall
have received such payments in full.

11.2Form of Amendment.    Any amendment or termination of the Plan shall be
effected by a written instrument signed by a duly authorized officer or officers
of the Company, certifying that the amendment or termination has been approved
by the Board.

12.   Employment Status/Waiver of Rights

This Plan does not constitute a contract of employment or impose on the Company
any obligation to retain the Participant as an employee, to change the status of
the Participant's employment, or to change the Company's policies regarding
termination of employment.

15

--------------------------------------------------------------------------------

Following a Change in Control, no waiver of rights by the Participant in return
for continued employment shall be effective with respect to the rights and
benefits provided under this Plan.

13.   Notices

All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered, if
mailed by registered, certified or express mail, postage prepaid, or if
delivered to a recognized courier service, addressed as follows:

If to the Participant:

To the address shown on the Company's records for tax reporting purposes.

If to the Company:

Countrywide Financial Corporation
4500 Park Granada
Calabasas, California 91302
Attention: Senior Human Resources Manager

Either party may change the address at which notice shall be given by a written
notice given in the above manner.

14.   Severability

If any provision of this Plan is held invalid or unenforceable, the remainder of
this Plan shall nevertheless remain in full force and effect, and if any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.

15.   Governing Law

To the extent not preempted by Federal law, the interpretation, construction and
performance of this Plan shall in all respects be governed by the laws of the
State of California.

16.   Code Section 409A

This Plan is intended to comply with Code Section 409A, to the extent
applicable. Notwithstanding any provision herein to the contrary, this Plan
shall be interpreted, operated and administered consistent with this intent.
Each separate installment of the Salary Separation Payment shall be treated as a
separate payment for purposes of determining whether such payment is subject to
or exempt from compliance with the requirements of Code Section 409A. In
addition, in the event that any Participant is a "specified employee" within the
meaning of Section 409A of the Code (as determined in accordance with the
methodology established by the Company as in effect on the date of termination
of such Participant's employee), any payment or benefits hereunder that are
nonqualified deferred compensation subject to the requirements of Section 409A
of the Code shall be provided to such Participant no earlier than six (6) months
after the date of such Participant's "separation from service" within the
meaning of Section 409A of the Code.

16

--------------------------------------------------------------------------------

        IN WITNESS WHEREOF, the Board of Directors having amended this Plan at
its meeting of June 24, 2008 has caused this Amendment and Restatement to be
executed this 24th day of June, 2008.

COUNTRYWIDE FINANCIAL CORPORATION

By:
 
/s/ LEORA I. GOREN

--------------------------------------------------------------------------------

 
  Title:   Senior Managing Director,
Chief Human Resources Officer    
Attest:
 
    /s/ BECKY BAILEY

--------------------------------------------------------------------------------

 
 

17

--------------------------------------------------------------------------------

APPENDIX A

Eligible Employee
Classifications
 
Members

X

  Senior Managing Directors and above

A

 

Managing Directors

B

 

Executive Vice Presidents, Senior Vice Presidents, Presidents

C

 

First Vice Presidents, Vice Presidents, Regional Vice Presidents, CSC Directors,
Branch Managers

D

 

All other Exempt Employees

E

 

All Non-Exempt Employees

Salary Separation Payment

        The Salary Separation Payment to which a Participant is entitled shall
be based on the Participant's employee classification as of the date immediately
preceding the date of the Participant's Qualifying Termination or, if greater,
as of the date on which the Change in Control occurs, and shall equal the amount
described in the table below:

Employee
Classifications
 
Salary Separation Payment

X

  Three (3) years Base Pay (as defined in Section 6.1(a)) plus 300% Bonus (as
defined in Section 6.1(a))

A

 

Two (2) years Base Pay (as defined in Section 6.1(a)) plus 200% Bonus (as
defined in Section 6.1(a)).

B

 

One (1) year Base Pay plus 100% Bonus.

C

 

Two (2) weeks Pay for each full year of service from first hire date with a
minimum payment of eight (8) weeks Pay and a maximum payment of twenty-six
(26) weeks Pay.

D

 

(2) weeks Pay for each full year of service from first hire date with a minimum
payment of two (2) weeks Pay and a maximum payment of twelve (12) weeks Pay.

E

 

Two (2) weeks Pay from first hire date with a minimum payment of two (2) weeks
Pay and a maximum payment of eight (8) weeks Pay.

--------------------------------------------------------------------------------

QuickLinks

Exhibit 10.118

COUNTRYWIDE FINANCIAL CORPORATION CHANGE IN CONTROL SEVERANCE PLAN (As Amended
and Restated June 24, 2008)
APPENDIX A