drops the Countrywide Financial Corp. name

TO BE NOTED: From Bloomberg:

"Bank of America Targets Image as ‘Countrywide’ Ends (Update2)

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By Jody Shenn

April 27 (Bloomberg) -- Bank of America Corp., the second- largest U.S. home lender after buying the biggest provider of credit before property prices slumped, hopes to bolster its mortgage brand as it drops the Countrywide Financial Corp. name.

The campaign includes a new consumer disclosure intended to let applicants see potential mortgage costs, said Barbara Desoer, the Charlotte, North Carolina-based bank’s mortgage chief. The one-page “Clarity Commitment” form includes worst- case scenarios for adjustable loans, reflecting a survey of 5,000 customers, she said in an April 23 telephone interview.

The company is promoting Bank of America Home Loans as it retires the Countrywide image 10 months after buying the company, starting two days ago at branches in California. Bank of America wants to send consumers a message along with the name change, hoping to build on “very strong momentum” after writing $85 billion of mortgages last quarter as rates fell to the lowest on record, she said.

“Signage and business cards are certainly one thing,” said Desoer, 56. “But it’s also about what the brand promises: That’s to be a responsible lender and help create successful homeowners.”

Bank of America has created Internet tools to help consumers understand “how much home they can reasonably afford, and help them take into consideration all of the costs of homeownership,” Desoer said. The bank also will offer “flat- fee” mortgages to homebuyers visiting its branches, she said.

‘Robust Marketing Campaign’

The company plans a “robust marketing campaign that includes multiple media,” Desoer said, declining to detail the cost. The Countrywide brand was created in 1969 by Angelo Mozilo, the butcher’s son from the Bronx who sold his lender last year, and co-founder David Loeb.

Bank of America reported a $4.25 billion first-quarter profit as mortgage production surged to $85 billion from $22 billion a year earlier. Origination profits totaled $1.6 billion, helping to make up for higher provisions for bad loans. The shares have fallen 77 percent in the past year to $8.92 as of 4 p.m. in New York Stock Exchange composite trading.

The government has provided capital and guarantees of $163 billion to Bank of America, which also bought Merrill Lynch & Co. last year. Writedowns and credit losses amid soaring mortgage defaults at the world’s largest financial companies total more than $1.3 trillion.

Under the “flat fee” program, Bank of America’s charges covering most typical third-party and lender expenses will total $1,995, $2,495 or $2,995, depending on the state. The program will expand to refinance loans and most other locations and customers next year, she said.

‘No Fee’ Loans

The bank sold a “no fee” mortgage starting in May 2007. Consumers found the loan more “suspicious” than the latest offer, thinking “there’s no free lunch,” Desoer said. Costs such as paying interest for the remaining days in the month in which the mortgage closed weren’t excluded. The bank stopped offering the product this year, said Dan Frahm, a spokesman.

The “no fee” loan covered appraisals and title work, and waived mortgage-insurance requirements on some loans with less than 20 percent down payments or home equity with no higher interest rates, Floyd Robison, who preceded Desoer, said in an interview at the time. That product can’t be easily sold after an origination today, Desoer said.

Bank of America has closed “a handful” of loans this month as it begins to process about 200,000 “reservations” for mortgages made possible by rule changes for Fannie Mae and Freddie Mac, the government-run mortgage-finance companies, she said. President Barack Obama said the program to aid borrowers who owe 80 percent to 105 percent of the current value of their home may help 4 million to 5 million homeowners lower payments.

Loan Rates Fall

Federal Reserve Chairman Ben S. Bernanke is buying as much as $1.25 trillion of Fannie Mae, Freddie Mac and Ginnie Mae mortgage securities to drive down home-loan rates.

The rate on a typical 30-year fixed mortgage averaged 4.80 percent last week, a survey by McLean, Virginia-based Freddie Mac showed. Rates fell from 6.46 percent in late October to 4.78 percent for the week ended April 2, the lowest in records since 1971.

Foreclosed properties helped drive down home prices in 20 U.S. cities by an average of 19 percent in January from a year earlier, the fastest decline on record, according to an S&P/Case-Shiller index.

Countrywide originated $1.3 trillion of mortgages in 2004, 2005 and 2006, and Bank of America made $470 billion, according to newsletter Inside Mortgage Finance data. San Francisco-based Wells Fargo & Co., which originated more than $100 billion last quarter, made almost $1.1 trillion during the period.

Name History

Washington Mutual Inc., the failed Seattle thrift whose assets JPMorgan Chase & Co. bought in September, lent almost $700 billion.

In a 2006 interview, Mozilo said that when he helped create Countrywide 40 years ago, at age 29, the name represented a potentially unreachable goal in a market that lacked national home lenders. The name also was a target for comedian Dana Carvey, who joked at a 2004 Mortgage Bankers Association dinner that the company could be called “All 50 States” Mortgage."

Mozilo didn’t return a telephone message today. Loeb died in 2003. The two also created a business that became IndyMac Bancorp, the thrift seized by regulators last year that was spun off by Countrywide in 1985.

To contact the reporter on this story: Jody Shenn in New York at jshenn@bloomberg.net."