Countrywide's Sambol won't join Bank of America
NEW YORK/BANGALORE (Reuters) - Bank of America Corp (BAC.N) said Countrywide Financial Corp CFC.N President David Sambol will retire rather than take over the combined companies' mortgage operations, pleasing those who saw him as one of the architects of the subprime mortgage crisis.
Sambol, the highest-ranking official at Countrywide after Chief Executive Angelo Mozilo, was named head of the combined mortgage group soon after Bank of America agreed in January to buy mortgage lender Countrywide for $4 billion.
Mozilo intends to leave the combined company, but Bank of America, based in Charlotte, North Carolina, agreed in January to award Sambol $28 million to induce him to stay.
Countrywide is the largest U.S. mortgage lender and has been a target of consumer advocates, politicians and regulators who have said its lending practices were a prime cause of the nation's housing slump.
"We think it's positive that Sambol will not be heading the mortgage unit," said Alan Fisher, executive director of the California Reinvestment Coalition, a group of 250 community nonprofits. "His history at Countrywide contributed to much of the housing crisis we're in now."
Countrywide shareholders are scheduled to vote on the acquisition on June 25 and the deal is expected to close in the third quarter.
Barbara Desoer, 55, who has been Bank of America's chief technology and operations officer, will become president of consumer real estate operations of the combined company, as part of a new consumer banking management structure. She will move to Calabasas from Charlotte.
Liam McGee, 53, will be president of consumer and small business banking, while Bruce Hammonds, 60, will become president of credit card and unsecured lending. Both McGee and Hammonds have senior roles at Bank of America currently. Desoer, McGee and Hammonds will report to Chief Executive Kenneth Lewis.
"The old model had one person at the top of the entire consumer and small business banking division," Bank of America spokesman Robert Stickler said. "That entity had become gigantic and was to become more gigantic with the addition of Countrywide. For us, the best potential growth was in U.S. deposit, cards and consumer real estate. We now will have a senior executive heading each."
SCHUMER APPLAUDS
Sen. Charles Schumer, a New York Democrat and critic of Countrywide, applauded the decision not to retain Sambol.
"Bank of America has done the right thing," Schumer said in a statement. "Countrywide did more to contribute to the subprime mortgage crisis than anyone else. You cannot divorce Countrywide, the company, from the executives who pioneered Countrywide's predatory practices."
California Reinvestment Coalition's Fisher welcomed Desoer's appointment.
"Barbara Desoer is well thought of and we hope her leading the mortgage unit will mean that Countrywide borrowers will have a better opportunity to stay in their homes," he said.
Countrywide referred calls for comment to Bank of America. Sambol was not available for immediate comment.
Bank of America shares fell 30 cents to close at $33.87 and Countrywide was up 39 cents at $4.98.
(Additional reporting by Steven Bertoni; Editing by Gerald E. McCormick and Andre Grenon)
