Bank of America Home Loans

Bank of America Home Loans was the mortgage business associated with Bank of America following the bank's acquisition of Countrywide Financial Corporation in 2008. Its immediate predecessor, Countrywide, had developed from a mortgage originator founded in 1969 into a large, diversified housing-finance company with activities spanning loan origination, servicing, securitization, mortgage banking, home-equity lending, warehouse finance, capital markets, insurance, and related closing services. Countrywide's mortgage platform originated loans through direct retail channels as well as through mortgage brokers and correspondent lenders. It also bought loans from other financial institutions, funded mortgage bankers through warehouse lines, serviced loans after origination, and sold or securitized many loans in the secondary market. The business therefore operated across much more of the mortgage value chain than a conventional bank branch lender. Its service infrastructure included payment collection, escrow administration, tax and insurance processing, title services, appraisal services, credit reporting, flood determinations, and other closing functions. At its peak before the financial crisis, Countrywide was one of the largest mortgage lenders in the United States. The reference material states that in 2006 it financed approximately one-fifth of all U.S. mortgages. Its growth was supported by broad product distribution, a national origination network, capital-markets activity, and substantial exposure to the secondary mortgage market. The company also maintained a federally chartered banking operation that gathered deposits and invested in mortgage loans and home-equity lines of credit. Bank of America announced in January 2008 that it would acquire Countrywide in an all-stock transaction valued at approximately $4.1 billion at the time. Regulatory approval followed in June, Countrywide shareholders approved the transaction later that month, and the acquisition closed on July 1, 2008. The purchase brought Countrywide's mortgage assets, servicing operations, employees, liabilities, and legal controversies into Bank of America's wider financial group during the global financial crisis. The Bank of America Home Loans name was used for the acquired mortgage platform and related consumer housing-finance activities. The business historically offered residential mortgages, refinancing, home-equity lines, government-backed lending, servicing, and ancillary closing services. Its predecessor also had a lower-credit-quality lending operation, Full Spectrum Lending, as well as wholesale and correspondent channels. Because the brand's public identity and organizational structure changed after the Countrywide integration, the current standalone status of Bank of America Home Loans is not clear from the supplied references. The relevant mortgage activities are now generally associated with Bank of America's broader consumer and mortgage businesses rather than an independently listed company.

The business now identified with Bank of America Home Loans traces its history to Countrywide Financial, a mortgage company founded in 1969 by David S. Loeb and Angelo Mozilo. The company began as a mortgage originator and gradually expanded into a national housing-finance enterprise. Its early public offering was weak, with the shares initially trading over the counter below one dollar, but the company later re-listed on the New York Stock Exchange in 1985 under the ticker CFC. Over the following two decades, Countrywide generated an exceptionally strong shareholder return, reflecting the growth of the U.S. mortgage market and the company's expansion across origination, servicing, banking, and capital markets. Countrywide's operating model was organized around several connected activities. Its mortgage-banking arm originated and funded new residential loans, purchased loans from other lenders, and distributed loans through the secondary market, frequently by placing them into mortgage-backed securities. Direct consumer channels included Consumer Markets and Full Spectrum Lending. The latter concentrated on borrowers with weaker credit profiles. Wholesale Lending supplied loans originated by mortgage brokers, while Correspondent Lending purchased loans from mortgage bankers, commercial banks, savings institutions, builders, and credit unions. The company retained or performed servicing functions for many loans. These included collecting borrower payments, administering escrow accounts, handling tax and insurance payments, making contractual advances to investors, and managing delinquent accounts. Countrywide also operated closing-service businesses under the LandSafe name, providing appraisal, credit-reporting, flood-determination, title, escrow, and related services. Countrywide's banking activities included Countrywide Bank and Countrywide Warehouse Lending. The bank gathered deposits through internet channels, call centers, and financial centers and invested substantially in mortgages and home-equity lines of credit. Warehouse lending provided short-term funding to mortgage bankers, many of whom later sold the resulting loans through Countrywide's correspondent or capital-markets channels. The capital-markets business traded and underwrote mortgage-related securities and handled institutional mortgage finance activities. The company also operated insurance businesses, including property, casualty, life, credit, lender-placed, and mortgage-related reinsurance activities. Outside the United States, its Global Operations segment included Global Home Loans, a United Kingdom mortgage-processing and subservicing venture established with Woolwich. That relationship changed after Barclays acquired Woolwich. Countrywide subsequently bought Barclays' remaining interest, although Barclays later brought mortgage origination and servicing activities back in-house. Countrywide also operated offshore technology and business-process services in India. Countrywide became one of the largest U.S. mortgage lenders. The supplied reference states that in 2006 the company financed roughly 20 percent of all U.S. mortgages. Its scale and exposure to residential credit, subprime lending, mortgage securitization, and servicing made it especially vulnerable during the housing and credit crisis. The company faced criticism and legal claims concerning underwriting, borrower treatment, employee practices, privacy, and lending discrimination. Bank of America announced its planned acquisition of Countrywide on January 11, 2008. The proposed transaction was structured as a stock purchase with an indicated value of about $4.1 billion. Federal Reserve approval was announced on June 5, Countrywide shareholders approved the merger on June 25, and completion occurred on July 1, 2008. The acquired mortgage operation was subsequently associated with the Bank of America Home Loans brand. The acquisition transferred Countrywide's mortgage production, servicing, banking, capital-markets, insurance, and legal legacy into Bank of America. The supplied references do not establish a precise date on which the Bank of America Home Loans brand ceased to operate as a distinct public-facing business. They also do not identify a current standalone executive team, headquarters, or separate legal listing. The brand is therefore best understood historically as Bank of America's post-acquisition mortgage platform, while its continuing mortgage activities are part of Bank of America's broader consumer and home-finance operations.

• 2008

  Bank of America completes the Countrywide acquisition

  [1]Bank of America Home Loansen.wikipedia.org

  Bank of America completes its purchase of Countrywide Financial on July 1, creating the corporate basis for Bank of America Home Loans.

• 2004

  Offshore services begin in India

  [1]Bank of America Home Loansen.wikipedia.org

  Countrywide establishes India-based technology and business-process operations supporting U.S. and U.K. activities.

• 1997

  Countrywide spins off IndyMac

  [1]Bank of America Home Loansen.wikipedia.org

  Countrywide Mortgage Investment is separated as an independent company that becomes IndyMac Bank.

• 1985

  Countrywide stock is listed on the New York Stock Exchange

  [1]Bank of America Home Loansen.wikipedia.org

  After trading over the counter, Countrywide's shares are re-listed on the NYSE under the ticker CFC.

• 1969

  Countrywide Financial is founded

  [1]Bank of America Home Loansen.wikipedia.org

  David S. Loeb and Angelo Mozilo establish the mortgage company that later becomes the predecessor of Bank of America Home Loans.

A national, vertically integrated housing-finance platform within Bank of America, combining consumer mortgage origination and refinancing with servicing, home-equity lending, secondary-market execution, and supporting property and closing services.

• Mortgage lending

  Residential mortgage loans

  The core business originated and funded residential mortgages through direct consumer channels, mortgage brokers, and correspondent lenders. The historical platform included conventional conforming loans, larger non-conforming loans, and government-supported lending. Many originated loans were sold into the secondary market, particularly through mortgage-backed securities, while the business often continued to service the loans.

• Mortgage lending

  Mortgage refinancing

  The mortgage platform provided refinancing for existing residential borrowers. Refinancing was distributed through retail and other origination channels and could be combined with servicing, closing, appraisal, title, escrow, and other support functions.

• Home-equity lending

  Home-equity lines of credit

  Countrywide's banking operation originated and purchased home-equity lines of credit, generally using deposits and mortgage-banking relationships to support housing-related lending. These products formed part of the broader home-finance platform acquired by Bank of America.

• Loan servicing

  Mortgage servicing

  Servicing operations collected borrower payments, administered escrow accounts, handled applicable tax and insurance payments, issued advances to mortgage-security trustees, and managed delinquency-related processes. Servicing generated recurring fees and other operating income associated with administration of mortgage portfolios.

• Mortgage closing services

  LandSafe closing services

  LandSafe and related businesses supplied supporting services for mortgage transactions, including residential appraisal, automated credit reporting, flood determinations, and title services. These activities helped the mortgage platform control or coordinate key steps between application, underwriting, closing, and servicing.

• 2005

  Overtime class-action settlement

  Countrywide settled allegations that account executives had been required to work long hours without proper overtime compensation. The settlement reportedly compensated about 400 employees.

  Source

• Alleged steering of Black and Hispanic borrowers

  A settlement with New York authorities addressed allegations that sales personnel directed Black and Hispanic borrowers into higher-cost loans. The agreement included borrower compensation, improved training and oversight, and a payment to New York State for investigation costs.

  Source

Read more

• 2008

  Acquire Countrywide FinancialM&A

  Background

  Countrywide was a major mortgage lender facing the severe housing and credit conditions of the late-2000s financial crisis. Bank of America proposed purchasing the company in an all-stock transaction valued at approximately $4.1 billion at announcement.

  Action taken

  Bank of America obtained Federal Reserve approval, secured Countrywide shareholder approval, and completed the acquisition on July 1, 2008.

  Aftermath

  The transaction brought Countrywide's mortgage origination, servicing, banking, capital-markets, insurance, employees, assets, liabilities, and legal issues into Bank of America. The acquired mortgage platform became associated with Bank of America Home Loans.

  Announced transaction value. $4.1 billion indicated value at announcement (January 2008 announcement)

  Source

1. 1Bank of America Home Loansen.wikipedia.org