UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

SCHEDULE 13G

Under the Securities Exchange Act of 1934

DOWNEY FINANCIAL CORP.

(Name of Issuer)

(Title of Class of Securities)

(CUSIP Number)

(Date of Event which Requires Filing of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule is filed:      

o       Rule 13d-1(b)
þ       Rule 13d-1(c)
o       Rule 13d-1(d)

The information required in the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

CUSIP No.		261018105		Page		2		of		9 Pages

CUSIP No.		261018105		Page		2		of		9 Pages

CUSIP No.		261018105		Page		2		of		9 Pages

CUSIP No. 261018105		Page 5 of 9 Pages

Item 1.

	(a)		Name of Issuer
			Downey Financial Corp.
	(b)		Address of Issuer’s Principal Executive Offices
			3501 Jamboree Road, Newport Beach, CA 92660

Item 2.

(a)

Name of Person Filing

          This statement is jointly filed by and on behalf of each of Serengeti Asset Management LP, J.L. Serengeti Management LLC and Joseph A. LaNasa III with respect to the ownership of shares of common stock of Downey Financial Corp. by Serengeti Partners LP and Serengeti Overseas Ltd. Serengeti Asset Management LP acts as an investment adviser to, and manages investment and trading accounts of, other persons, including Serengeti Partners LP and Serengeti Overseas Ltd. Serengeti Asset Management LP may be deemed, through investment advisory contracts or otherwise, to beneficially own securities owned by other persons, including Serengeti Partners LP and Serengeti Overseas Ltd. J.L. Serengeti Management LLC is the general partner of Serengeti Asset Management LP and may be deemed to control Serengeti Asset Management LP and beneficially own securities owned by Serengeti Asset Management LP. Mr. LaNasa III is the sole member of J.L. Serengeti Management LLC and may be deemed to control J.L. Serengeti Management LLC and beneficially own securities owned by J.L. Serengeti Management LLC.

          Each reporting person declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, the beneficial owner of any securities covered by this statement.

          Each reporting person may be deemed to be a member of a group with respect to the issuer or securities of the issuer for the purposes of Section 13(d) or 13(g) of the Act. Each reporting person declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, (i) acting (or has agreed or is agreeing to act) with any other person as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of the issuer or otherwise with respect to the issuer or any securities of the issuer or (ii) a member of any syndicate or group with respect to the issuer or any securities of the issuer.

(b)

Address of Principal Business Office or, if none, Residence

          The address of the principal business office of each reporting person is 632 Broadway, 12th Floor, NewYork, NY 10012.

	(c)		Citizenship
			See Item 4 on the cover pages hereto.
	(d)		Title of Class of Securities
			Common Stock
	(e)		CUSIP Number
			261018105

CUSIP No. 261018105		Page 6 of 9 Pages

Item 3. If this statement is filed pursuant to §§240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is:

(a)		o		Broker or dealer registered under Section 15 of the Act (15 U.S.C. 78o).
(b)		o		Bank as defined in Section 3(a)(6) of the Act (15 U.S.C. 78c).
(c)		o		Insurance company as defined in Section 3(a)(19) of the Act (15 U.S.C. 78c).
(d)		o		An investment company registered under Section 8 of the Investment Company Act of 1940 (15 U.S.C. 80a-8).
(e)		o		An investment adviser in accordance with §240.13d-1(b)(1)(ii)(E);
(f)		o		An employee benefit plan or endowment fund in accordance with §240.13d- 1(b)(1)(ii)(F);
(g)		o		A parent holding company or control person in accordance with §240.13d- 1(b)(1)(ii)(G);
(h)		o		A savings associations as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);
(i)		o		A church plan that is excluded from the definition of an investment company under Section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3);
(j)		o		A group, in accordance with §240.13d-1(b)(1)(ii)(J).

Item 4. Ownership.

	(a)		Amount beneficially owned:
			See Item 9 on the cover pages hereto.
	(b)		Percent of class:
			See Item 11 on the cover pages hereto.
	(c)		Number of shares as to which such person has:

	(i)		Sole power to vote or to direct the vote:
			See Item 5 on the cover pages hereto.
	(ii)		Shared power to vote or to direct the vote:
			See Item 6 on the cover pages hereto.
	(iii)		Sole power to dispose or to direct the disposition of:
			See Item 7 on the cover pages hereto.
	(iv)		Shared power to dispose or to direct the disposition of:
			See Item 8 on the cover pages hereto.

Item 5. Ownership of 5% or Less of a Class.

     If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following o.

Item 6. Ownership of More than 5 Percent on Behalf of Another Person

     See response to Item 4.

CUSIP No. 261018105		Page 7 of 9 Pages

Item 7. Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on by the Parent Holding Company or Control Person.

     Not Applicable.

Item 8. Identification and Classification of Members of the Group

     Each reporting person may be deemed to be a member of a group with respect to the issuer or securities of the issuer for the purposes of Section 13(d) or 13(g) of the Act. Each reporting person declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, (i) acting (or has agreed or is agreeing to act) with any other person as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of the issuer or otherwise with respect to the issuer or any securities of the issuer or (ii) a member of any syndicate or group with respect to the issuer or any securities of the issuer.

Item 9. Notice of Dissolution of Group

     Each reporting person may be deemed to be a member of a group with respect to the issuer or securities of the issuer for the purposes of Section 13(d) or 13(g) of the Act. Each reporting person declares that neither the filing of this statement nor anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any other purpose, (i) acting (or has agreed or is agreeing to act) with any other person as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of the issuer or otherwise with respect to the issuer or any securities of the issuer or (ii) a member of any syndicate or group with respect to the issuer or any securities of the issuer.

Item 10. Certifications

     By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

		Page 8 of 9 Pages

SIGNATURES

     After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.

June 3, 2008

		Page 9 of 9 Pages

EXHIBIT INDEX

Exhibit
Number		Description
99.1		Joint Filing Agreement dated June 3, 2008 among Serengeti Asset Management LP, J.L. Serengeti Management LLC and Joseph A. LaNasa III