Bank of America Buys Countrywide for $4 Billion

By Anuradha Kher, MHN Online EditorCharlotte, N.C. — Bank of America Corp. today announced its decision to purchase the troubled home loan lending company Countrywide Financial for approximately $4 billion in stock.The purchase will make Bank of America the nation’s largest mortgage lender and loan servicer. Meanwhile, Countrywide will benefit from the stability of being part of the largest and one of the most financially strong financial institutions in the United States, according to Bank of America.“Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation’s premier lender to consumers,” Bank of America Chairman and CEO Kenneth D. Lewis noted in a statement.The statement, published on the bank’s Web site, said that the agreement had been approved by the boards of directors of both Bank of America and Countrywide but was subject to approval by Countrywide’s shareholders and regulators.“We believe this is the right decision for our shareholders, customers and employees,” Angelo R. Mozilo, Countrywide’s chairman and CEO added in the statement.Bank of America says it will benefit from Countrywide’s broader mortgage capabilities, including its retail, wholesale and correspondent distribution networks and that it would gain greater scale in originating and servicing mortgages in the U.S.The Calabasas, Calif-based Countrywide Financial reported $408 billion in mortgage originations in 2007 and has a servicing portfolio of about $1.5 trillion with 9 million loans. The purchase also includes Countrywide’s Lender Placed insurance and other businesses.“We are aware of the issues within the housing and mortgage industries,” Lewis added. “The transaction reflects those challenges. Mortgages will continue to be an important relationship product, and we now will have an opportunity to better serve our customers and to enhance future profitability.”