Bank of America Details Community Development, Foreclosure Relief Goals

CHARLOTTE, N.C., April 28 /PRNewswire/ -- Bank of America today announced key initiatives to reduce the impact and number of foreclosures on communities as well as new goals in corporate philanthropy and community development and investment. Bank of America also said it will locate the combined national consumer mortgage headquarters in Calabasas, California, once it completes the purchase of Countrywide Financial Corp.

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Bank of America, which expects to close on the acquisition in the third quarter subject to Countrywide shareholder and regulatory approval, will operate the consumer mortgage business under the Bank of America brand.

"We believe the financial strength, security and stability of the combined company will allow us to enable people to buy homes and stay in homes, and to assist many of those affected by the current mortgage troubles," said Bank of America Global Consumer and Small Business Banking President Liam McGee during testimony at a Federal Reserve hearing in Los Angeles regarding the Countrywide transaction.

The combined company expects to modify or workout at least $40 billion in troubled mortgage loans in the next two years and estimates these efforts will keep at least 265,000 customers in their homes.

In addition to foreclosure prevention efforts, the combined company will continue Bank of America's policy of permitting tenants to continue living in properties subject to foreclosure for 60 days after the completion of foreclosure proceedings. If the tenant voluntarily leaves the property within 30 days of the completion of foreclosure proceedings, they will receive a $2,000 cash-for-keys payment to help defray moving expenses.

"We will continue to work with distressed borrowers to match the customer's repayment ability with the appropriate loss mitigation option, including loan modifications, forbearances, repayment plans, lower rates and principal reductions," McGee said. "We will not assess new late charges for customers in foreclosure and we will waive certain other associated fees, when permitted."

CRA Rating, Community Development

McGee announced Bank of America was notified last week by the Office of the Comptroller of the Currency that for the sixth-consecutive period the bank has achieved an "outstanding" rating on its recently completed Community Reinvestment Act (CRA) exam.

Bank of America has been a national leader in community development since the passage of the CRA 30 years ago, McGee said. The latest "outstanding" rating reflects the company's continuing commitment to serve the needs of low- and moderate-income individuals, businesses and neighborhoods.

"Our commitment to communities is ingrained in the Bank of America culture that holds all our associates accountable for doing the right thing for customers, shareholders, communities and one another," said McGee.

To further demonstrate that ongoing commitment, McGee also announced that beginning in 2009, Bank of America will pursue a new goal to lend and invest $1.5 trillion for community development over the next 10 years. The goal, the largest in U.S. history, replaces existing community development goals of both Bank of America and Countrywide.

Areas of focus will include affordable housing, economic development and consumer and small business lending. More details about the goal will be released once the purchase is complete and the company has met with community groups and other stakeholders. This new level for community development lending and investments is double Bank of America's existing $750 billion goal set in 2004.

"This new goal raises the bar and is certain to enhance quality of life for millions of Americans in need," McGee said.

Finally, Bank of America announced a new 10-year, $2 billion national corporate philanthropy goal.

"Through our Neighborhood Excellence strategy we work with communities to identify the most critical local issues and deploy our resources to support community leaders and organizations to help confront those challenges," said Andrew D. Plepler, president of the Bank of America Charitable Foundation. "Ultimately, we hope to enhance the quality of life in diverse neighborhoods throughout the country."

Lending Guidelines

As previously announced in April 22 testimony before the Federal Reserve in Chicago, Bank of America unveiled new mortgage lending guidelines. Following the purchase, the combined mortgage business plans to continue to offer retail customers the following types of first lien mortgages:

-- Conforming loans underwritten to standard guidelines of the government and government-sponsored enterprises, including Expanded Approval guidelines and FHA/VA guidelines designed for low- and moderate-income borrowers. -- Non-conforming loans with terms expected to produce no greater risk of default than conforming loans. -- Interest-only, fixed-rate and adjustable-rate mortgage products, subject to a 10-year minimum interest-only period that removes the possibility of short-term payment shock. -- Fixed-period ARMs that provide borrowers low initial rates with the security of fixed payments, subject to protections against severe step-ups in payment amounts.

The company also said in previous testimony it expects to continue its long-established policy of not originating subprime mortgages. Following the purchase, Bank of America expects to make the following changes to certain home loan products offered by the combined mortgage business.

-- Discontinue certain nontraditional mortgages -- including so-called "option-ARM loans" -- in which payments may not cover accrued interest and cause negative amortization. -- Significantly curtail some other nontraditional mortgages, such as certain "low documentation" loans. -- Implement enhanced borrower protections soon after completion of the Countrywide purchase, including limits on prepayment penalties and protections on non-traditional loans such as interest-only and hybrid ARMs, which limit the risk of future payment shock and provide long-term affordability. Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 59 million consumer and small business relationships with more than 6,100 retail banking offices, nearly 18,500 ATMs and award-winning online banking with nearly 25 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in more than 150 countries and has relationships with 99 percent of the U.S. Fortune 500 companies and 83 percent of the Fortune Global 500. Bank of America Corporation stock is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.

Bank of America Corporate Philanthropy

Building on a long-standing tradition of investing in the communities it serves, Bank of America is in its fourth year of achieving an unprecedented 10-year goal to donate $1.5 billion to nonprofit organizations engaged in improving the health and vitality of their neighborhoods. Funded by Bank of America, the Bank of America Charitable Foundation is one of the most generous financial institutions in the world and the second largest donor of all U.S. corporations in cash contributions. Bank of America approaches giving through a national strategy called "neighborhood excellence" under which it works with local leaders to identify and meet the most pressing needs of individual communities. Through Team Bank of America, bank associate volunteers contributed more than 650,000 hours in 2007 to enhance the quality of life in their communities nationwide.

For more information about Bank of America Corporate Philanthropy, please visit http://www.bankofamerica.com/foundation .

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