Countrywide Home Loans, Inc.has renamed themselves and now does business as Bank of America Home Loans in that they have become a subsidiary of Bank of America. They provide residential loans and the services connected to the home purchasing process in the United States. The company purchases, sells, and services home loans. The company originates mortgage loans primarily through relationships with real estate agents, builders, organizations, mortgage loan brokers, and other financial intermediaries. In addition, it purchases mortgage loans from other lenders, which include mortgage bankers, commercial banks, savings and loan associations, home builders, and credit unions. Further, the company provides loan sales, processing, and closing services to institutions, such as banks and financial planners.
Living Down Their Former Image
Countrywide’s new role is more focused on the residential market. Their interest in buying and trading mortgages from other companies is however somewhat disconcerting. Countrywide was taken to court in 2011 and was required to pay $108 million dollars to over 450,000 homeowners for overcharging them for services fees in the three years between 2005 and 2008. Although they are now hidden from their former identity by their Bank of America label the lack of goodwill displayed by their former behavior is less than reassuring. They sell mortgages, unlike many other financial institutions that promise to be the service provider for your home mortgage until it is over. This company has a more than checkered past.
Better Safe than Sorry
There is really no way to know what kind of deal Countrywide can offer compared to other lending institutions without doing a comparison to other options. However, caution at minimum seems like the best approach. The APR is designed to present the actual cost of obtaining financing, by requiring that some, but not all, closing fees are included in the APR calculation. These fees in addition to the interest rate determine the estimated cost of financing over the full term of the loan. Since most people do not keep the mortgage for the entire loan term, it may be misleading to spread the effect of some of these upfront costs over the entire loan term.