Countrywide Financial’s shoddy lending practices have left hundreds of thousands of mortgage borrowers at risk of losing the single most important asset in their lives – their homes. If Bank of America acquires Countrywide, these mortgage borrowers could either benefit or suffer greatly from the merger. A letter signed by 91 California community groups was sent today to Bank of America’s Chief Executive Officer Kenneth Lewis asking him to declare a foreclosure moratorium, and ensure the Bank will keep troubled borrowers in their homes.
In acquiring Countrywide, Bank of America will be responsible for more than nine million new customers. The 91 California community groups, many of whom serve homeowners threatened with foreclosure as a result of predatory subprime loans, are asking Bank of America to develop a plan that outlines exactly how the Bank will help their customers avoid foreclosure. The letter to Mr. Lewis, which was drafted by the California Reinvestment Coalition, had three specific requests. If Bank of America acquires Countrywide, the groups are asking the Bank to:
• Initiate an immediate foreclosure moratorium on all mortgage loans in Bank of America’s and Countrywide’s portfolios, including those that are currently being serviced.
• Modify loans for borrowers in danger of losing their homes to a fixed conventional loan with an interest rate of no more than 6% for 30 years.
• Maintain Countrywide’s headquarters in Calabasas, and its loan servicing center in Simi Valley. These Countrywide employees are needed to modify and restructure loans.
“Bank of America’s acquisition of Countrywide should not be just about profits,” says Rhea Serna, the California Reinvestment Coalition’s senior policy advocate. “The merger has the potential to reverse Countrywide’s bad deeds and give hundreds of thousands of homeowners the opportunity to stay in their homes.”
Countrywide is one of the leading subprime lenders in the nation. According to Inside B&C Lending, Countrywide was the number one servicer of subprime loans in the first nine months of 2007, and was the number two subprime lender in the last nine months of the year. Many of these higher cost, and often predatory loans targeted people in communities of color and low-income neighborhoods.
“The fate of Countrywide borrowers is inextricably linked with that of their neighborhoods, cities and the state,” says Alan Fisher, executive director of the California Reinvestment Coalition. “The predicted $14.1 billion shortfall in the remainder of the State of California’s fiscal year can be directly linked to the mortgage crisis.”
Bank of America publicly calls itself a leader in the world of banking. Mr. Lewis has said the bank creates opportunities for people “to fulfill their dreams.” Countrywide’s bad lending practices are ruining the dreams of thousands of Californians – Countrywide borrowers and employees alike – and Bank of America has the opportunity to rebuild them. Mr. Lewis’ leadership on this important issue is needed now more than ever.
For more information contact Rhea Serna or Alan Fisher at (415) 864-3980.