BoA Strengthens Market Presence
Some on Wall Street still question whether or not Bank of America's deal to buy troubled Countrywide Financial Corp. will close as planned, but BoA's top executive remains enthusiastic about the transaction.
Kenneth Lewis, chairman and CEO of Bank of America, said after Countrywide released year-end results that the deal to buy Countrywide remains "a go." And he reiterated BoA's plans to grow its home loans business.
Speaking at a Citigroup financial services conference just hours after Countrywide's year-end results were released, Mr. Lewis said Countrywide's performance, which revealed higher credit costs and rising delinquencies, was in line with Bank of America's due diligence and offering price. "At this point, everything is a go for completing this transaction," Mr. Lewis said.
He said Countrywide's year-end results showed improvement in its underlying mortgage business during the fourth quarter.
Moreover, Mr. Lewis said that even before the Countrywide deal was announced, Bank of America was gaining market share in the consumer real estate lending segment, and he suggested that the company's appetite for growing its mortgage business remains strong.
Bank of America has plenty of room to grow its mortgage presence. Currently, the bank estimates that only 9% of its deposit customers also have a mortgage from Bank of America. The bank estimates that its customers account for some $4 trillion of potential mortgage opportunity within its own deposit customer base.
Similarly, only 18% have a home-equity loan with the bank, leaving over $500 billion of potential home-equity business on the table. (See related story, page 28.) (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/