Bank of America agrees to purchase Countrywide Financial Corp.

11 January 2008

Charlotte: Bank of America Corporation has announced a definitive agreement to purchase Countrywide Financial Corp. in an all-stock transaction worth approximately $4 billion.

The purchase makes Bank of America the largest mortgage lender and loan provider in the US.

The transaction benefits Bank of America as Countrywide's broader mortgage capabilities, including its extensive retail, wholesale and correspondent distribution networks would now be part of the US banking major.

The Calabasas, California-based Countrywide operates over 1,000 field offices, with a sales force of nearly 15,000. Countrywide also has a leading mortgage technology platform, a well known brand in home lending and management expertise in a number of key areas. Bank of America in turn would gain greater scale in originating and servicing mortgages in the US.

According to a press release by Bank of America, 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.

Bank of America chairman and chief executive officer Kenneth D Lewis said, "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."