Bank of America Retires Countrywide Brand

The Countrywide brand, until recently the biggest name in mortgages, is being retired as Bank of America consolidates its home lending operations under a single roof.

The move allows Bank of America to put its own stamp on its entire mortgage operation while eliminating the tarnished Countrywide name. Countrywide, which was acquired by Bank of America last July, was strongly identified with the collapse of the housing market due to its heavy involvement in subprime loans.

The newly unveiled Bank of America Home Loans division technically combines both the Countrywide and Bank of America home lending operations, although efforts to fully integrate the two will continue for some time. At the time of the merger, Countrywide was the nation's largest home lender and Bank of America was second.

Consumer-friendly initiatives launched

The elimination of the Countrywide name comes at the same time that Bank of America is unveiling what are being touted as some new consumer-friendly mortgage practices. Chief among them is the "Clarity Commitment," a one-page document explaining the terms of a mortgage in plain English, including the interest rate, closing cost and a "worst-case scenario" for adjustable rate mortgages.

The company has also launched a new Bank of America Home Loans interactive web site intended to give customers personalized guidance through the home lending process. The company says the site is designed to give customers feedback on the factors that guide lender's decisionmaking process, enabling potential borrowers to take steps to improve their chances of obtaining a loan or enable them to obtain a better deal.

Flat fee mortgages

Bank of America is also introducing a product it calls "Flat Fee Mortgage Plus" that replaces separate application, closing and other fees with a single charge ranging from $2,000-$3,000, depending on the state. The service is being offered through 6,100 Bank of America home lending centers around the country and will be made available through further locations in the future. Information on the program does not yet appear to be available through the company's web site.

The combined Bank of America/Countrywide operation issued $85 billion in new mortgages in the first quarter of 2009, up from $22 billion for the same quarter one year earlier. Bank of America agreed to purchase Countrywide in January 2008 for $4 billion in Bank of America stock, but a drop in the stock price caused the valued of the deal to decline to about $2.5 billion by the time the deal was finalized on July 1.