Mortgage News – Bank of America Rids Itself of Countrywide Association

In an effort to strengthen their mortgage brand, Bank of America is dropping the Countrywide moniker from its identification. Prior to the sweeping decline in property values, Bank of America was the second-largest mortgage lender in the United States.

Starting with their branches in California, Bank of America is retiring the Countrywide label just 10 months after purchasing the company in July of 2008. With mortgage rates as low as they have ever been on record, Bank of America intends to increase their leverage in the mortgage industry by continuing to build on the powerful momentum they gained last quarter when they wrote more than $85 billion in home loans.

The Countrywide brand was born in 1969 and is being retired nearly 40 years later after being purchased by Bank of America as it neared collapse. Many believe the Countrywide designation was too toxic to save, so executives at Bank of America were resolved to abandon the name. As the re-branding is completed, it coincides with what is traditionally the busiest time of the year for home buying.

Heavily involved in the sub-prime lending movement, Countrywide was the largest lender in the United States at the pinnacle of the housing market. When borrowers of sub-prime mortgage loans progressively began to default on their monthly mortgage payments in 2007, the housing market began to collapse. As loan losses mounted and mortgage volume slowed, Bank of America negotiated a deal to acquire the failing Countrywide in January of 2008. Six months later, the deal was closed at a value of about $2.5 billion, which was $1.5 billion less than initially agreed upon due to a severe decline in Bank of America’s stock. The acquisition agreement was an all-stock deal originally valued at $4 billion.

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