Bank of America Corporation has agreed to purchase Countrywide Financial Corp. in an all-stock transaction worth approximately $4 billion, making Bank of America the country’s largest mortgage lender and loan servicer
Bank of America will make use of Countrywide’s broader mortgage capabilities, including its extensive retail, wholesale and correspondent distribution networks. The Calabasas, California-based company operates more than 1,000 field offices and has a sales force of nearly 15,000. Countrywide also has a mortgage technology platform, a well known brand in home lending and management expertise in a number of areas.
Bank of America would gain greater scale in originating and servicing mortgages in the US Countrywide had $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.
“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. 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 US economy and over time it will be a key area of growth for Bank of America,” says Kenneth D. Lewis, chairman and CEO, Bank of America.
Countrywide’s deep retail distribution will enhance Bank of America’s network of more than 6,100 banking centers throughout the US After closing, Bank of America plans to operate Countrywide separately under the Countrywide brand with integration occurring no sooner than 2009.
“Bank of America is one of the largest financial institutions in the US 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” adds Angelo R. Mozilo, chairman and CEO, Countrywide.