The U.S. Federal Reserve Thursday approved Bank of America's plan to acquire Countrywide Financial Corp., the California-based subprime mortgage lender that has been on the verge of bankruptcy since last summer due to the housing crisis.
The federal approval now makes Countrywide's shareholders meeting, scheduled for June 25, one of the final steps for approval of the 4-billion-dollar deal. Bank of America said earlier this year it expected the deal to be finalized by July 1.
Bank of America, the largest bank in the United States, will own about a quarter of the total mortgage market in the country with combined assets of about 1.9 trillion dollars after it takes over market leader Countrywide.
Bank of America CEO Ken Lewis said in a statement that the transaction will allow the bank to expand in mortgages, as well as sell other products to Countrywide customers.
"Mortgages continue to be a key consumer product for Bank of America, serving as a driver for adding new customers and deepening relationships with existing ones," he said.
Bank of America announced the takeover plan in January amid speculation that Countrywide was on the brink of bankruptcy. The bank had earlier invested 2 billion dollars in the distressed lender.
Source: Xinhua
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