Magazine article American Banker

B of A Signals Intentions with Exec Plan

Magazine article American Banker

B of A Signals Intentions with Exec Plan

Article excerpt

Bank of America Corp.'s announcement Thursday that it has chosen Countrywide Financial Corp.'s president and chief operating officer to run its mortgage business may indicate the Charlotte company is willing to give third-party origination a try, observers said.

The $1.7 trillion-asset company said David Sambol would run its mortgage operation when B of A completes its $4 billion acquisition of Countrywide. He would report to Bruce Hammonds, who currently runs B of A's credit card business but would be put in charge of all consumer credit products.

Scott Stern, the chief executive of the St. Louis mortgage banking cooperative Lenders One, said Thursday in an interview that he believes Mr. Sambol's leading role "is absolutely a clear signal" that B of A would stick with Countrywide's reliance on third-party originations - for now.

Such channels can still be profitable if B of A controls the areas where there is the most risk, such as underwriting and appraisal review, Mr. Stern said. "If they can make that work, then the acquisition goes from being a good deal to a home run."

However, the acquisition's overall status remains uncertain until the deal closes, he said.

Christopher Whalen, the managing director at Lord, Whalen LLC's Institutional Risk Analytics, said Thursday in an interview that he was encouraged that B of A plans to keep Mr. Sambol.

"It doesn't surprise me that he was given a key role," Mr. Whalen said. However, were B of A to pursue Countrywide's model, it would need to eliminate such "innovations" as streamlined appraisals. …

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