Bank of America Is On Track to Merge with Countrywide 3rd Quarter 2008

New Home Lending Guidelines for the merged Bank of America / Countrywide Mortgage operations Post Acquisition

April 22nd, 2008, Bank of America Announced their new Home Lending Guidelines for the merged Bank of America / Countrywide Mortgage operations after the acquisition of Countrywide.  They made their announcement before the Federal Reserve in Chicago.  Their stated goal was to promote affordable, responsible home lending for the merged operations.  Bank of America said they plan to implement new lending guidelines in its consumer mortgage business as soon as is practical after it combines operations with Countrywide Financial Corporation.

The combined mortgage business plans will offer retail customers the following types of first lien mortgages:

• Conforming loans underwritten to standard guidelines of government-sponsored enterprises and the government, including FHA and VA loans and other loans designed for low-and moderate-income borrowers.
• Interest-only fixed-rate and adjustable-rate mortgages (ARMs) that are subject to a 10-year minimum interest-only period, which lessens 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 steep increases in payment amounts.

The company also said it expects to continue its long-established policy of not originating sub prime 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 non-traditional mortgages where monthly payments may not cover all interest, or so-called option-ARMs.
• Significantly curtail other non-traditional 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.

In other recent Bank of America news,

• Bank of America Corp.'s announced April 21^st first-quarter profit fell 77% as credit-loss provisions jumped $4.78 billion, driven by weakness in home-equity loans as well as credit extended to small businesses and home builders.   In a news release CEO Ken Lewis said. "We remain concerned about the health of the consumer given the prolonged housing slump, sub prime issues, employment levels and higher fuel and food prices."
• Bank of America Consumer Credit Executive Bruce Hammonds announced the retirement of Floyd Robinson.
• David Sambol announced his leadership team following Legal Day 1 of the Countrywide acquisition.

You can find AJ Nisen on Active Rain at Contra Costa California Mortgages.  Call AJ to talk about your Mortgage, Mortgage Rates, Free Credit Report or visit AJ's website to use his mortgage calculator. 

Alan 'AJ' Nisen
Mortgage Loan Officer
Email: aj.nisen@bankofamerica.com
http://mortgage.bankofamerica.com/ajnisen 
http://www.activerain.com/ajn