Chicago Tribune (04/22/08) ; Yerak, Becky
Bank of America plans to announce during an April 22 public hearing on its proposed purchase of Countrywide Financial that the combined company will not offer option adjustable-rate mortgages, will significantly reduce low-documentation loans and will limit prepayment penalties. The moves are a response to consumer advocates who have criticized the bank for engaging in lending practices that have contributed to the increase in defaults and foreclosures. The hearing will take place at the Federal Reserve Bank of Chicago, and it will impact the Federal Reserve Board's decision on whether to approve the $4 billion purchase. "We recognize this tightening restricts the availability of credit to some borrowers," says Bruce Hammonds, Bank of America's global consumer credit executive, "but this will help ensure that those who get loans can afford to repay them."
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