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CNN reports that Bank of America will eliminate all but the most sound mortgage products as it attempts to complete its takeover of Countrywide. Countrywide was made famous by its option ARM and other non-traditional products which have clearly back-fired. Which begs the question – why Countrywide mortgage at all?
Bank of America announced that the main asset that they wanted from Countrywide was the midwestern retail bank operations where BofA is currently lacking (and the massive servicing customer base), so it makes sense that with their booming retail business they aren’t working hard to make sure that Countrywide’s mortgage-units have a product worth selling.
From the CNN report on Bank of America exiting the risky-mortgage biz:
Bank of America says it will alter its mortgage product menu once it completes its acquisition of mortgage lender Countrywide Financial.
Bank of America (BAC, Fortune 500) says it will offer traditional mortgages that fit government-sponsored enterprise guidelines. It will also offer interest-only fixed-rate and adjustable-rate mortgages that have long reset periods to lessen the likelihood of short-term payment spikes.
The Charlotte, N.C.-based bank will not originate subprime mortgages or loans that allow customers to make payments for less than the monthly interest due.
Last 3 posts by Morgan
- Subprime Bananas - June 28th, 2009
- Roubini: No confidence in government exit strategy - June 24th, 2009
- Goldman bonuses largest in firm's 140-year history - June 21st, 2009
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