Consumer advocates nervous about Bank of America Corp.'s proposed takeover of troubled mortgage lender Countrywide Financial Corp. are pressuring the bank to provide assurances that Countrywide borrowers facing foreclosure won't lose their homes.
The campaign is likely to intensify Monday as members of the Federal Reserve Board begin two days of public hearings on the proposed $4.1 billion stock deal.
The acquisition, which is expected to close in the third quarter, would make Charlotte, N.C.-based Bank of America the nation's largest mortgage lender in addition to the nation's largest consumer bank.
The Fed is required to consider whether the deal would harm consumers. It held its initial public hearing last week in Chicago.
In Los Angeles, four members of the Federal Reserve Board are scheduled to hear from officials with Bank of America and scores of speakers from state government, consumer and business groups, and labor unions, among others.
Calabasas, Calif.-based Countrywide said no one from the company was scheduled to testify.
Consumer advocates claim Countrywide has not been responsive enough to homeowners having trouble making their mortgage payments and say Bank of America needs to be more aggressive in helping borrowers.
"Our focus is not on killing the deal, but on making sure the deal works, not just for the corporations but for people in neighborhoods and borrowers," said Alan Fisher, executive director of the California Reinvestment Coalition, one of the advocacy groups set to testify.
Fisher's group wants Bank of America to give assurances that, if the deal goes through, it would modify mortgages into affordable fixed-rate loans and help borrowers who can't afford new loan terms unload their homes without hurting their credit.
Consumer groups have also sought assurances from Bank of America that it won't slash Countrywide's work force, something they say would slow efforts to help borrowers.
Among those who testified at that hearing in Chicago was the Rev. Jesse Jackson, who called on Bank of America to "make whole" Countrywide borrowers who contend they were harmed by unfair lending practices.
Bank of America said in Chicago that it would tighten mortgage lending standards once it completes the Countrywide acquisition and that it would cease making option adjustable-rate mortgages.
Such loans give borrowers the option to make a lower payment but can result in the unpaid portion being added to the principal balance.