Tag Archives: Bank of America/Countrywide

In a statement released Tuesday Bank of America announced it will close the wholesale lending channel of its company that it obtained with its acquisition of Countrywide Financial Corp. The company plans to focus more operational resources toward fulfillment capacity for its direct-to-consumer retail channel, which helps existing and new customers obtain mortgage financing, and toward enhancing its leadership positions in corresponded and warehouse lending.

Ambac Financial Group, Inc. opened a lawsuit against Bank of America Corp. over improperly underwritten loans the company says the bank's Countrywide unit used to induce it into purchasing mortgage-backed securities. After reviewing 6,533 of the 268,000 loans it insured for Countrywide, Ambac found that 97 percent of the reviewed loans didn't follow the underwriting guidelines Countrywide said it used to assemble loans.

The law firm of Gibbs & Bruns LLP says its institutional investor clients have issued binding instructions to Bank of New York, serving as trustee, to open an investigation of ineligible mortgages behind more than $26 billion of residential mortgage backed securities (RMBS) issued by subprime lender Countrywide. The firm's clients hold more than 25 percent of the voting rights of the RMBS in question, and can demand the repurchase of mortgages that did not conform to required representations and warranties.

RiskSpan, Inc., a provider of integrated risk and valuation solutions, announced Wednesday that Allen H. Jones is the company's new managing director of its Washington, D.C., federal services consulting practice. Jones has more than 25 years in mortgage lending and housing finance. Previously, he was Bank of America's government lending executive, managing the transition and integration of Countrywide under the BofA umbrella, before becoming the bank's executive for default management public policy and national outreach.

Fitch Ratings has upgraded the individual and preferred stock ratings of Bank of America. But the agency says the upgrades are tempered by the bank's high level of nonperforming loans and the likelihood of large volumes of mortgage repurchase requests from the GSEs and other secondary market investors, largely because of the loans the bank inherited from its Countrywide acquisition. Fitch also expressed concern about BofA's exposure to home equity loans, especially those with loan-to-value ratios above 100 percent.

Bank of America has agreed to another hefty lawsuit settlement to smooth over charges brought against Countrywide. A U.S. district judge in Los Angeles has approved BofA's payout of $600 million to Countrywide investors who claim the lender wasn't forthcoming with disclosures about its business of making low-quality, high-risk loans. Countrywide's third-party auditor, KPMG, also agreed to pay $24 million. It's the largest shareholder settlement awarded out of the subprime mortgage meltdown.