CHARLOTTE, N.C., July 1 /PRNewswire/ -- Bank of America Corporation
today completed its purchase of Countrywide Financial Corp. to create the
nation's leading mortgage originator and servicer.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050720/CLW086LOGO-b )
Bank of America will focus on responsible home lending, serving as a
reliable source of mortgages for the American consumer. Bank of America
also will assist new and existing customers with selecting the right
product to meet their needs.
"Mortgages are one of the three main cornerstone consumer financial
products along with deposits and credit cards," said Bank of America
Chairman and Chief Executive Officer Kenneth D. Lewis. "This purchase
significantly increases Bank of America's market share in consumer real
estate, and as our companies combine, we believe Bank of America will
benefit from excellent systems and a broad distribution network that will
offer more ways to meet our customers' credit needs."
As previously announced in April, Bank of America plans to offer the
following types of first-lien mortgages: conforming loans underwritten to
standard guidelines of government-sponsored enterprises and the government,
including FHA and VA loans and other loans designed for low-and moderate-
income borrowers; non-conforming loans with terms expected to produce no
greater risk of default than conforming loans; interest-only fixed-rate and
adjustable-rate mortgages (ARMs) that are subject to a 10-year minimum
interest-only period, which lessens the possibility of short-term payment
shock, and fixed-period ARMs that provide borrowers low initial rates with
the security of fixed payments, subject to protections against steep
increases in payment amounts.
Bank of America reiterated it will continue its long-established policy
of not originating subprime mortgages. As announced previously, Bank of
America will discontinue certain nontraditional mortgages - including
option-ARM loans. It also will significantly curtail some other
nontraditional mortgages, such as certain low-documentation loans and will
implement enhanced borrower protections over time as part of the transition
process.
Countrywide's existing customers eventually will gain access to a broad
set of consumer financial products such as credit cards and deposit
services.
"Now we begin to combine the two companies and prepare to introduce our
new name and way of operating," said Barbara Desoer, president of the
combined mortgage, home equity and insurance businesses. "We have the
opportunity to renew America's confidence in homeownership with unmatched
capabilities to deliver the products homebuyers need and understand and
give customers a simple process and service experience they've come to
expect."
The company reiterated its combined national consumer mortgage division
will be based in Calabasas, Calif. The combined company will begin
originating mortgage and home equity products under the Bank of America
brand by mid-2009.
The company anticipates substantial cost savings from combining the two
companies. Cost reductions will come from a range of sources, including the
elimination of positions announced last week, and the reduction of
overlapping technology, vendor and marketing expenses. In addition, the
company is expected to benefit by leveraging its broad product set to
deepen relationships with existing Countrywide customers.
Under the terms of the agreement, shareholders of Countrywide received
.1822 of a share of Bank of America stock in exchange for each share of
Countrywide.
As previously announced in April, Bank of America will pursue a new
goal to lend and invest $1.5 trillion for community development over the
next 10 years beginning in 2009. The goal will focus on affordable housing,
economic development and consumer and small business lending and replace
existing community development goals of both companies.
Bank of America also previously announced a $35 million neighborhood
preservation and foreclosure prevention package by both companies focusing
on grants and low-cost loans to help local and national nonprofit
organizations engaged in foreclosure prevention, and to purchase vacant
single-family homes for neighborhood preservation. The combined company
will modify or workout about $40 billion in troubled mortgage loans in the
next two years and these efforts will keep an estimated 265,000 customers
in their homes. The combined loss mitigation staffs will be maintained at
the level of more than 3,900 for at least one year.
Bank of America
Bank of America is one of the world's largest financial institutions,
serving individual consumers, small and middle market businesses and large
corporations with a full range of banking, investing, asset management and
other financial and risk-management products and services. The company
provides unmatched convenience in the United States, serving more than 59
million consumer and small business relationships with more than 6,100
retail banking offices, nearly 18,500 ATMs and award-winning online banking
with nearly 25 million active users. Bank of America is the No. 1 overall
Small Business Administration (SBA) lender in the United States and the No.
1 SBA lender to minority-owned small businesses. The company serves clients
in more than 150 countries and has relationships with 99 percent of the
U.S. Fortune 500 companies and 83 percent of the Fortune Global 500. Bank
of America Corporation stock (NYSE: BAC) is a component of the Dow Jones
Industrial Average and is listed on the New York Stock Exchange.
http://www.bankofamerica.com
SOURCE Bank of America Corporation
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CONTACT:
Investors: Kevin Stitt, +1-704-386-5667, Lee
McEntire, +1-704-388-6780, Leyla Pakzad, +1-704-386-2024, or
Reporters May Contact: Scott Silvestri, +1-980-388-9921,
scott.silvestri@bankofamerica.com, all of Bank of America
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