Bank of America Corp. has completed its takeover of failed mortgage lender Countrywide Financial Corp. of Calabasas, Calif., nearly three months after agreeing to purchase the high-profile victim of the subprime-mortgage crisis.
The Charlotte, N.C.-based bank’s $2.5 billion acquisition of Countrywide will greatly expand its role in the mortgage business, making the bank the nation’s largest “mortgage lender and servicer,” according to a statement from the company.
However, Countrywide was one of the nation's largest issuers of subprime mortgages and suffered extensive losses from the credit crisis.
These losses are set to increase the cost of protecting Bank of America's credit, according to data from Phoenix Partners Group of New York, according to Reuters.
To offset those costs, the bank plans to cut costs from “a range of sources,” including layoffs and “and the reduction of overlapping technology, vendor and marketing expenses,” according to the bank.
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