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It isn’t easy being Bank of America these days. The bank had previously thought to be in decent standing up until it acquired struggling firm Merrill Lynch, and since that point things have been..well…awful. The flow of bad press has been non-stop, between Merrill Lynch’s crumbling balance sheet, questionable bonuses, and giving former Executive John Thain the axe, the firm simply can’t escape the ongoing drama. Yet let’s not forget BofA’s other acquisition during the whole financial fiasco, and that’s Countrywide, which recently officially ended its existence as Bank of America “rebranded” the company.
The reasons for the change should be fairly obvious. Countrywide was a great place to be just a few year prior, operating as the nation’s biggest home lender and highly regarded in the industry. Unfortunately, when the existence of increasingly toxic assets was fully revealed, Countrywide was sitting on the biggest waste dump. As a result, the company has been closely associated with housing’s collapse and known for lending out foolishly amid huge paydays for Angelo R. Mozilo (the firm’s cofounder) and FBI investigations. I don’t know about you, but that probably doesn’t reflect well on Bank of America, which has had enough image problems already.
The new firm will be called Bank of America Home Loans, and the marketing campaign involves a new consumer disclosure. The idea is that the firm will let applicants see exactly what their potential mortgage costs are. The statement, called a “Clarity Commitment” includes end-game scenarios for adjustable loans and takes into account data from surveys of about 5,000 customers. I can’t help feel like the whole thing is too little too late for most homeowners, but it is still a step in the right direction.
The question now becomes whether retiring Countrywide will finally put the firm’s terrible image to rest, and whether consumers will be willing to put at least some measure of trust in Bank of America Home Loans. The “Clarity” statement along with other efforts aim to help potential homeowners take advantage of historically low rates while projecting the image of a responsible lender out to create homeowners that can..well…stay in their homes. What do you think? Are we willing to accept Bank of America is a reformed, responsible lender?
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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