Daily News and Information for the Mortgage Loan Originator
Bank of America Buys Countrywide
Friday, January 11, 2008
- By Staff Writer, Originator Times
CHARLOTTE, NC - Bank of America has announced they will buy Countrywide Financial Corp. for $4 billion. The all-stock deal did not come as a surprise, as many anticipated Bank of America to come to the aid of Countrywide, who has been hit hard by the lending crisis. In October, Countrywide announced a $1.2 billion third quarter loss which was the company's first quarterly loss in 25 years.
Bank of America says it plans to operate Countrywide separately, keeping the Countrywide brand intact. Integration will happen no sooner than 2009. Countrywide reported $408 billion in mortgage originations in 2007. They have a servicing portfolio of $1.5 trillion that includes nine million loans. The buy will make Bank of America the country's largest mortgage lender and loan servicer.
The buy was an all-stock deal. Countrywide shareholders will get .1822 of a share of Bank of America stock for each Countrywide share. Bank of America said the deal should generate $670 million in after-tax savings and that it will not negatively impact 2008 earnings.
"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 Chief Executive Officer Kenneth D. Lewis said in a statement. "Countrywide customers will gain access to a broad set of consumer products including credit cards and deposit services. Home ownership is a fundamental pillar of the U.S. economy and over time it will be a key area of growth for Bank of America."
"We are aware of the issues within the housing and mortgage industries," Lewis continued. "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."
"We believe this is the right decision for our shareholders, customers and employees," said Countrywide Chairman and Chief Executive Officer Angelo R. Mozilo in a statement. "Bank of America is one of the largest financial institutions in the U.S. and internationally, and we are confident that the combination of Countrywide and Bank of America will create one of the most powerful mortgage franchises in the world. We have had a long and positive relationship with Bank of America and our servicing and origination businesses, as well as other aspects of our operations, will be substantially enhanced as a result of this transaction."
Countrywide Receives $2 Billion Strategic Equity Investment From Bank Of America Countrywide Financial Corporation, a diversified financial services provider and the leading mortgage lender and servicer in the U.S. announced today that it has received a $2 billion strategic equity investment from Bank of America. The transaction was completed and funded today.
Countrywide to Cut Up to 12,000 Jobs Countrywide Financial Corp., the largest U.S. mortgage lender, said on Friday it would cut up to 12,000 jobs, the biggest job reduction by a single company to date that stems from the deepening U.S. housing crisis.
MetLife and EverBank Reach Agreement MetLife, Inc. announced the execution of a purchase agreement whereby it will acquire EverBank Reverse Mortgage LLC of Bloomfield, NJ, from its parent, EverBank.
