Bank of America Corp. has completed its purchase of Countrywide Financial Corp. The company says it will focus on responsible home lending. Bank of America also will assist new and existing customers with selecting the right products to meet their needs.
‘Mortgages are one of the three main cornerstone consumer financial products, along with deposits and credit cards,’ says Kenneth D. Lewis, Bank of America chairman and chief executive officer. ‘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.’
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; nonconforming 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.
The company 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.
Source: Bank of America Corp.