A few years ago, Countrywide Financial Corp. was not only the nation's biggest home lender but also highly regarded -- an "apple pie" company, as a former marketer for the Calabasas lender recalls.
Linked more recently with high-risk loans, co-founder Angelo R. Mozilo's huge paydays and FBI investigations, the Countrywide name became "too toxic to resuscitate," as another expert puts it -- and a liability for Bank of America Corp., which snatched it up last year as it neared collapse.
And so over the weekend, nearly 10 months after the Bank of America deal closed, Countrywide Home Loans signs came down and Bank of America Home Loans signs appeared at the lender's 215 storefront offices in California. It was the start of a rebranding of nearly 1,300 Countrywide mortgage offices nationwide.
"It's the end of an era in the country, but times change," Mozilo said in a brief interview Friday.
He noted that virtually all stand-alone home lenders like Countrywide, along with once-respected banks like World Savings and Wachovia that specialized in tricky adjustable-rate mortgages, had been swallowed by megabanks including Wells Fargo & Co. and JPMorgan Chase & Co. as well as Bank of America.
Countrywide enjoyed nearly 40 years of "a wonderful reputation" and helped millions of people fulfill the dream of home ownership, Mozilo said.
The former Countrywide chief executive wouldn't discuss the company's fall, but he said: "Bank of America is a great company that has done a great job of serving the country, and they will continue to do a great job of serving our customers."
The new storefront signs come with a pledge from Charlotte, N.C.-based Bank of America to serve customers by keeping loans simple and affordable and explaining them clearly.
It was a clear response to complaints about the subprime and exotic loans that inflated the financial returns of Countrywide and other lenders during the housing boom of the last several years. Critics blame that aggressive lending for producing a flood of foreclosures and the deep recession.
"What I hear time and time again in focus groups is that people want no gimmicks, no surprises," said Barbara Desoer, president of Bank of America's mortgage and insurance unit, which is based at the same Calabasas complex that was Countrywide's headquarters.
In an interview Friday, Desoer offered a preview of the new approach to be offered beginning today, which includes an interactive website with customized tools -- designed "to demystify the lending process," she said. The idea is to educate prospective borrowers about how much home they can reasonably afford and what to expect from the bank as they work their way through the loan process.
Bank of America also is introducing a one-page, plain-language summary of a mortgage's interest rate, terms, potential payment changes and other details of the loan. This "Clarity Commitment" document is to be given to borrowers when they apply and again at closing to supplement more complicated government-required disclosure forms.
Other lenders also have pledged to improve disclosures, often as part of settlements of litigation alleging abusive lending. But complaints of deceptive practices by the industry have continued.
"We're all in favor of borrowers knowing more, but at best disclosure is only a small part of a responsible system of lending," said Caryn Becker, policy counsel at the Oakland office of the Center for Responsible Lending, a nonprofit, nonpartisan organization that advocates restricting controversial loan types and features.
Bank of America Chairman and CEO Kenneth Lewis says he has tried addressing those concerns. After taking over Countrywide, Lewis barred the lender from making subprime mortgages. The company also stopped offering home loans written without verifying borrowers' incomes as well as a type of adjustable-rate mortgage on which borrowers could pay so little that their loan balances rose.
Although he eagerly swore off those former Countrywide staples, Lewis expressed disappointment at consumer surveys conducted by Bank of America showing a rapid disappearance of the goodwill attached to the Countrywide name.
"Even when we bought them, they tested well," Lewis said in a recent interview. "But the negative press, just time and time again, took it down. So they went from first to last" in the surveys.
In the meantime, Countrywide was no longer the undisputed market leader. In the first three months of this year, the mortgage operation of Countrywide and Bank of America originated $85 billion in home loans, ranking the combination No. 2. In first place was Wells Fargo, which, bolstered by its purchase of Wachovia late last year, originated $101 million in mortgages.
Bank of America, however, is the largest provider of mortgage customer service, handling billing on $2.1 trillion in home loans at the end of last year compared with $1.8 trillion for Wells Fargo, according to National Mortgage News.