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Thursday, Mar 28, 2024

Countrywide Wants to Save on Fees With New Bank

Countrywide Wants to Save on Fees With New Bank By CARLOS MARTINEZ Staff Reporter Countrywide Credit Industries is going into the banking business. The newest division of the Calabasas-based financial services giant has opened four branches in the San Fernando Valley and, if successful, will follow up with more throughout the United States. Branches of what is now called Countrywide Bank opened in February inside Countrywide mortgage lending offices in Thousand Oaks, Woodland Hills, Northridge and Glendale. Twelve more will open throughout the state this year, said James S. Furash, president of the bank. The new bank is a subsidiary of Treasury Bank of Alexandria, Va., which Countrywide acquired last year, allowing the company to avoid the long regulatory process, or the cost, of a startup. Countrywide Bank offers traditional consumer banking services and products such as access to ATMs, interest-bearing checking accounts, savings accounts, certificates of deposit and retirement and money market accounts. But perhaps more significantly, Countrywide now handles about $6 billion in impound fees for taxes and insurance from mortgage holders that it sends to other banks for processing, said Robert Napoli, an equities analyst with ABN AMRO in New York. “Before, they were paying fees at other banks,” he said. “Now they can collect those fees themselves.” Analysts welcome the diversification effort as a means to buffer the company from fluctuating interest rates that could adversely impact revenue in its core mortgage lending operations. Napoli said Countrywide’s move into the banking business was long overdue. “They really should have done this five years ago,” he said. “It’s a wise move on their part and it’s very complementary to their mortgage lending business.” Angelo Mozilo, Countrywide CEO, said the bank is part of the company’s effort to diversify and move into other segments of the financial services industry. “This is an excellent time to get started,” Furash said. “There are a lot of dissatisfied bank customers out there that want a bank that caters to their needs.” Furash said Countrywide has invested about $100 million in the new bank venture, but would not reveal any revenue projections it has for it. Countrywide, which operates more than 550 offices in nearly all 50 states, writes, sells and services mortgages mostly for single-family homes. The company has recently begun diversifying by offering other products such as home equity lines, lines of credit, mortgage refinancing and insurance.

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