Countrywide Financial Corp said on Thursday that mortgage loan funding tumbled 40 percent to $23 billion in November, sending its shares down nearly 4 percent before the market opened.

The bulk of the decline comes from a near-evaporation of Countrywide's subprime lending business and a sharp fall-off in adjustable-rate mortgages.

Subprime mortgage funding fell to $17 million in November, down from $3.06 billion a year earlier, when lending standards were lax. Adjustable-rate fundings fell to $3.33 billion from $14.3 billion.

In November 2006, Countrywide's total mortgage funding was $38.3 billion.

Countrywide, the No. 1 U.S. mortgage lender, has been battered by escalating loan defaults, a crisis that has reverberated around the globe and forced the White House to fashion a bailout plan for cash-strapped borrowers undone by falling housing prices and loan payments resetting at higher interest rates.

Countrywide shares were down 3.7 percent at $10.14 in premarket trading.

The lender said average daily loan application activity was $1.9 billion in November, a 32 percent decline from a year earlier.

The company's mortgage loan pipeline, or loans in process, was $42.6 billion at Nov. 30, down from $62 billion a year earlier.

(Reporting by Tim McLaughlin, editing by John Wallace and Lisa Von Ahn)