Bank of America would base the combined mortgage business in Calabasas if the deal were approved by the Fed, which reviews bank takeovers to determine whether they are in the public interest.
Participants at the hearing lauded Bank of America for its promises to the Fed to refinance or modify $40 billion in mortgages to help 265,000 homeowners over two years, to double its community development lending and to increase its charitable giving by 33%.
Housing and community groups that have worked with the bank also praised its follow-through on past commitments to community development.
Bank of America's Community Reinvestment Act rating, a regulatory gauge of its service in low-income neighborhoods, has been "outstanding" for six years in a row.
But participants said there was a lot to make up for at Countrywide, including complaints of promoting risky adjustable-rate loans, steering people with good credit into expensive sub-prime loans and botching loan collection and foreclosure proceedings so that struggling borrowers were frustrated, not assisted.
A Countrywide spokesman didn't respond to a request for comment.
Liam McGee, Bank of America's head of consumer and small-business lending, said the bank had been working with congressional Democrats on a plan to provide more Federal Housing Administration-insured loans to borrowers. The banks would first have to write down the value of the loans, restoring the homeowners' equity.
McGee said the bank would offer tenants in foreclosed properties a choice: stay two months in the home after foreclosure or be paid $2,000 if they leave within a month.
Bank of America's president for California, Janet Lamkin, said the bank was working on a comprehensive approach to addressing problems in areas where foreclosures are rampant, such as the Inland Empire.
In those areas, Bank of America might try to help nonprofits convert seized houses to uses that benefit the community, McGee said in an interview.
The hearing continues for a second and final day today at the Los Angeles branch of the Federal Reserve Bank of San Francisco, 950 S. Grand Ave. in downtown Los Angeles.
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scott.reckard@latimes.com
