Bank Of America / Countrywide refund $1.5 Trillion Dollars to
customers.
$1.5 Trillion Community Development and Investment Goal
CHARLOTTE, N.C., April 28 /PRNewswire/ -- Bank of America
today announced key initiatives to reduce the impact and
number of foreclosures on communities as well as new goals in
corporate philanthropy and community development and
investment. Bank of America also said it will locate the combined
national consumer mortgage headquarters in Calabasas,
California, once it completes the purchase of Countrywide
Financial Corp.
Bank of America, which expects to close on the acquisition in the
third quarter subject to Countrywide shareholder and regulatory
approval, will operate the consumer mortgage business under
the Bank of America brand.
"We believe the financial strength, security and stability of the
combined company will allow us to enable people to buy homes
and stay in homes, and to assist many of those affected by the
current mortgage troubles," said Bank of America Global
Consumer and Small Business Banking President Liam McGee
during testimony at a Federal Reserve hearing in Los Angeles
regarding the Countrywide transaction.
The combined company expects to modify or workout at least
$40 billion in troubled mortgage loans in the next two years and
estimates these efforts will keep at least 265,000 customers in
their homes.
In addition to foreclosure prevention efforts, the combined
company will continue Bank of America's policy of permitting
tenants to continue living in properties subject to foreclosure for
60 days after the completion of foreclosure proceedings. If the
tenant voluntarily leaves the property within 30 days of the
completion of foreclosure proceedings, they will receive a $2,000
cash-for-keys payment to help defray moving expenses.
"We will continue to work with distressed borrowers to match the
customer's repayment ability with the appropriate loss mitigation
option, including loan modifications, forbearances, repayment
plans, lower rates and principal reductions," McGee said. "We
will not assess new late charges for customers in foreclosure
and we will waive certain other associated fees, when permitted."
CRA Rating, Community Development
McGee announced Bank of America was notified last week by
the Office of the Comptroller of the Currency that for the
sixth-consecutive period the bank has achieved an "outstanding"
rating on its recently completed Community Reinvestment Act
(CRA) exam.
Bank of America has been a national leader in community
development since the passage of the CRA 30 years ago,
McGee said. The latest "outstanding" rating reflects the
company's continuing commitment to serve the needs of low-
and moderate-income individuals, businesses and
neighborhoods.
"Our commitment to communities is ingrained in the Bank of
America culture that holds all our associates accountable for
doing the right thing for customers, shareholders, communities
and one another," said McGee.
To further demonstrate that ongoing commitment, McGee also
announced that beginning in 2009, Bank of America will pursue
a new goal to lend and invest $1.5 trillion for community
development over the next 10 years. The goal, the largest in
U.S. history, replaces existing community development goals of
both Bank of America and Countrywide.
Areas of focus will include affordable housing, economic
development and consumer and small business lending. More
details about the goal will be released once the purchase is
complete and the company has met with community groups and
other stakeholders. This new level for community development
lending and investments is double Bank of America's existing
$750 billion goal set in 2004.
"This new goal raises the bar and is certain to enhance quality of
life for millions of Americans in need," McGee said.
Finally, Bank of America announced a new 10-year, $2 billion
national corporate philanthropy goal.
"Through our Neighborhood Excellence strategy we work with
communities to identify the most critical local issues and deploy
our resources to support community leaders and organizations
to help confront those challenges," said Andrew D. Plepler,
president of the Bank of America Charitable Foundation.
"Ultimately, we hope to enhance the quality of life in diverse
neighborhoods throughout the country."
Lending Guidelines
As previously announced in April 22 testimony before the
Federal Reserve in Chicago, Bank of America unveiled new
mortgage lending guidelines. Following the purchase, the
combined mortgage business plans to continue to offer retail
customers the following types of first lien mortgages:
-- Conforming loans underwritten to standard guidelines of the
government
and government-sponsored enterprises, including Expanded
Approval
guidelines and FHA/VA guidelines designed for low- and
moderate-income
borrowers.
-- Non-conforming loans with terms expected to produce no
greater risk of
default than conforming loans.
-- Interest-only, fixed-rate and adjustable-rate mortgage
products,
subject to a 10-year minimum interest-only period that removes
the
possibility of short-term payment shock.
-- Fixed-period ARMs that provide borrowers low initial rates with
the
security of fixed payments, subject to protections against severe
step-ups in payment amounts.
The company also said in previous testimony it expects to
continue its long-established policy of not originating subprime
mortgages. Following the purchase, Bank of America expects to
make the following changes to certain home loan products
offered by the combined mortgage business.
-- Discontinue certain nontraditional mortgages -- including
so-called
"option-ARM loans" -- in which payments may not cover accrued
interest
and cause negative amortization.
-- Significantly curtail some other nontraditional mortgages, such
as
certain "low documentation" loans.
-- Implement enhanced borrower protections soon after
completion of the
Countrywide purchase, including limits on prepayment penalties
and
protections on non-traditional loans such as interest-only and
hybrid
ARMs, which limit the risk of future payment shock and provide
long-term affordability.
customers.
$1.5 Trillion Community Development and Investment Goal
CHARLOTTE, N.C., April 28 /PRNewswire/ -- Bank of America
today announced key initiatives to reduce the impact and
number of foreclosures on communities as well as new goals in
corporate philanthropy and community development and
investment. Bank of America also said it will locate the combined
national consumer mortgage headquarters in Calabasas,
California, once it completes the purchase of Countrywide
Financial Corp.
Bank of America, which expects to close on the acquisition in the
third quarter subject to Countrywide shareholder and regulatory
approval, will operate the consumer mortgage business under
the Bank of America brand.
"We believe the financial strength, security and stability of the
combined company will allow us to enable people to buy homes
and stay in homes, and to assist many of those affected by the
current mortgage troubles," said Bank of America Global
Consumer and Small Business Banking President Liam McGee
during testimony at a Federal Reserve hearing in Los Angeles
regarding the Countrywide transaction.
The combined company expects to modify or workout at least
$40 billion in troubled mortgage loans in the next two years and
estimates these efforts will keep at least 265,000 customers in
their homes.
In addition to foreclosure prevention efforts, the combined
company will continue Bank of America's policy of permitting
tenants to continue living in properties subject to foreclosure for
60 days after the completion of foreclosure proceedings. If the
tenant voluntarily leaves the property within 30 days of the
completion of foreclosure proceedings, they will receive a $2,000
cash-for-keys payment to help defray moving expenses.
"We will continue to work with distressed borrowers to match the
customer's repayment ability with the appropriate loss mitigation
option, including loan modifications, forbearances, repayment
plans, lower rates and principal reductions," McGee said. "We
will not assess new late charges for customers in foreclosure
and we will waive certain other associated fees, when permitted."
CRA Rating, Community Development
McGee announced Bank of America was notified last week by
the Office of the Comptroller of the Currency that for the
sixth-consecutive period the bank has achieved an "outstanding"
rating on its recently completed Community Reinvestment Act
(CRA) exam.
Bank of America has been a national leader in community
development since the passage of the CRA 30 years ago,
McGee said. The latest "outstanding" rating reflects the
company's continuing commitment to serve the needs of low-
and moderate-income individuals, businesses and
neighborhoods.
"Our commitment to communities is ingrained in the Bank of
America culture that holds all our associates accountable for
doing the right thing for customers, shareholders, communities
and one another," said McGee.
To further demonstrate that ongoing commitment, McGee also
announced that beginning in 2009, Bank of America will pursue
a new goal to lend and invest $1.5 trillion for community
development over the next 10 years. The goal, the largest in
U.S. history, replaces existing community development goals of
both Bank of America and Countrywide.
Areas of focus will include affordable housing, economic
development and consumer and small business lending. More
details about the goal will be released once the purchase is
complete and the company has met with community groups and
other stakeholders. This new level for community development
lending and investments is double Bank of America's existing
$750 billion goal set in 2004.
"This new goal raises the bar and is certain to enhance quality of
life for millions of Americans in need," McGee said.
Finally, Bank of America announced a new 10-year, $2 billion
national corporate philanthropy goal.
"Through our Neighborhood Excellence strategy we work with
communities to identify the most critical local issues and deploy
our resources to support community leaders and organizations
to help confront those challenges," said Andrew D. Plepler,
president of the Bank of America Charitable Foundation.
"Ultimately, we hope to enhance the quality of life in diverse
neighborhoods throughout the country."
Lending Guidelines
As previously announced in April 22 testimony before the
Federal Reserve in Chicago, Bank of America unveiled new
mortgage lending guidelines. Following the purchase, the
combined mortgage business plans to continue to offer retail
customers the following types of first lien mortgages:
-- Conforming loans underwritten to standard guidelines of the
government
and government-sponsored enterprises, including Expanded
Approval
guidelines and FHA/VA guidelines designed for low- and
moderate-income
borrowers.
-- Non-conforming loans with terms expected to produce no
greater risk of
default than conforming loans.
-- Interest-only, fixed-rate and adjustable-rate mortgage
products,
subject to a 10-year minimum interest-only period that removes
the
possibility of short-term payment shock.
-- Fixed-period ARMs that provide borrowers low initial rates with
the
security of fixed payments, subject to protections against severe
step-ups in payment amounts.
The company also said in previous testimony it expects to
continue its long-established policy of not originating subprime
mortgages. Following the purchase, Bank of America expects to
make the following changes to certain home loan products
offered by the combined mortgage business.
-- Discontinue certain nontraditional mortgages -- including
so-called
"option-ARM loans" -- in which payments may not cover accrued
interest
and cause negative amortization.
-- Significantly curtail some other nontraditional mortgages, such
as
certain "low documentation" loans.
-- Implement enhanced borrower protections soon after
completion of the
Countrywide purchase, including limits on prepayment penalties
and
protections on non-traditional loans such as interest-only and
hybrid
ARMs, which limit the risk of future payment shock and provide
long-term affordability.
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