Countrywide merger faulted, BofA names mortgage exec

By Jonathan Stempel

NEW YORK (Reuters) - Bank of America Corp (BAC.N: Quote, Profile, Research) said on Thursday that Countrywide Financial Corp's (CFC.N: Quote, Profile, Research) second-highest ranking executive will run its mortgage business, and a large Countrywide investor said it opposes the bank's roughly $4.4 billion purchase of the nation's largest mortgage lender.

David Sambol, Countrywide's chief operating officer and top official other than Chief Executive Angelo Mozilo, will run Bank of America's mortgage unit after the merger.

Sambol became Countrywide's COO in September 2006 after the sudden departure of his predecessor Stanford Kurland.

Though Countrywide lost more than $1.6 billion in the second half of 2007, Bank of America Chief Executive Kenneth Lewis said on January 11 he wanted to retain some senior company executives, whom he called "very, very good operators."

The second-largest U.S. bank expects to finish buying Calabasas, California-based Countrywide in the third quarter. The combined company would make one in four U.S. home loans. Bank of America is based in Charlotte, North Carolina.

The merger drew opposition from hedge fund SRM Global, which in a regulatory filing said it has taken a 30 million share, or 5.19 percent, stake in Countrywide.

"(Countrywide's board) and its advisers should fully explain to shareholders the reasons why they have agreed to recommend the transaction to shareholders at less than half of the company's book value," SRM said. "The company is strong and will rapidly return to profit on a stand-alone basis."

SRM said it may try to talk to both companies and other Countrywide shareholders.