Save Our Bank... S.O.B.

Bank of America (NYSE:BAC) will come under increasing pressure this week to rescind its offer to put a top Countrywide executive in charge of the companies' combined mortgage business after reports that Countrywide is the subject of a criminal investigation by US authorities.

David Sambol, president and chief operating officer of the embattled US mortgage lender, is due to take over the role following the completion of BofA's $4bn takeover of Countrywide.

But Chuck Schumer, the Democratic senator from New York, has urged BofA to reconsider the appointment, calling Mr Sambol one of the lead architects of Countrywide's business model, which he said had been a "main contributor" to the mortgage crisis.
A meeting between Mr Schumer and Mr Sambol is being scheduled for this month at BofA's request.

"It is important to get to the bottom of all the accusations involving Countrywide," Mr Schumer said in a statement on Sunday. "We have always believed the company cut corners, and investigations by the SEC and FBI could hopefully bring that wrongdoing to light." Countrywide and BofA were unavailable for comment on Sunday.

The Wall Street Journal and the New York Times reported this weekend that Countrywide was one of several lenders facing an early-stage investigation by the Federal Bureau of Investigation.

The FBI said on Sunday that 16 companies were being investigated for fraud related to the mortgage crisis. This is two more than the 14 companies FBI officials had confirmed in January. The FBI has not identified any of the companies. The Department of Justice did not return calls seeking comment.

The political heat on Countrywide has increased considerably in recent weeks as the housing crisis has shown no signs of abating and the economy appears close to - or in - recession.

On Friday, Angelo Mozilo, founder and chief executive of Countrywide, faced a barrage of criticism from Democratic lawmakers as he testified in front of the House oversight and government reform committee, along with Stan O'Neal, former chief executive of Merrill Lynch, and Chuck Prince, former chief executive of Citigroup.

Henry Waxman, the committee chairman, said: "It seems like everyone is hurting except for you."

But Mr Mozilo, who engineered the takeover by BofA, defended himself.

"As our company did well, I did well. But when the company last year experienced the unanticipated and unprecedented seizing up of the capital and credit markets . . . my direct compensation . . . declined substantially," Mr Mozilo said.

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GUILTY

-Christopher Rockey