Sambol Out After Countrywide/BofA Merger
Buried in a press statement from Bank of America Corp. (BAC) earlier Wednesday that discussed the company's new consumer banking structure in a post-Countrywide-merger world was an industry bombshell that current Countrywide Financial Corp. (CFC) president David Sambol would "retire" after the acquisition and transition was complete. Sambol had been tapped at the end of January to lead the combined BofA/Countrywide mortgage platform, a decision that had since hit the rocks as criticism of the Calabasas-based lender has hit a new crescendo in recent weeks. Senator Charles Schumer (D-NY) essentially called for Sambol's head after a series of hearings on foreclosure management processes at the nation's largest servicer, saying on May 7 that Bank of America should reconsider its decision to purchase Countrywide's business. Reuters' DealZone suggested that the quick turnaround in plans at BofA was likely due to Congressional pressure, although press represenatives with the North Carolina-based bank have steadfastly asserted the move was BofA's own choice. Schumer clearly took credit for the change in strategy, however, calling Sambol "Countrywide’s chief cook and bottle washer on the scene" and saying that "Bank of America has done the right thing." "Schumer got his wish, and BofA was likely told behind closed doors to remove Sambol, or else," said one source, a vice president at a large national bank, on the condition that he not be identified by name. The source said that given the government's involvement in quietly enabling the initial deal, he didn't see it as far fetched that government officials were now pushing for Bank of America to distance itself from the troubled lender and its upper management as much as possible. With Sambol on the wane, the reins of BofA's consumer mortgage operations will instead be handed to Barbara Desoer, currently operations and technology chief at the bank -- and a 31-year Bank of America veteran. She will be based in Calabasas, California, a signal that while BofA is ditching Countrywide's name and management, it's likely looking to keep the infrastructure the company has put into place. "Sambol is being forced out, no doubt," said a management consultant that works in the mortgage banking industry, and asked not to be named for this story. "You don't kick the president of the whole operation to the curb unless you've got a very good reason to do so." The Countrywide president, of course, won't be leaving empty-handed; Sambol's retirement will entitle him to a $28 million severance package. For his part, BofA CEO Kenneth Lewis stressed Desoer's prior bank management experience, calling the success of the Countrywide "critical" to the bank's future operations. "Barbara Desoer is an ideal person to lead our mortgage business forward," Lewis said in the press statement. "She previously operated a predecessor bank branch system in California and also previously headed consumer products (including mortgage) and marketing at our company." Of course, she wasn't deemed ideal back in January. But these are different times, even a mere four months later. Disclosure: The author was long CFC and held no positions in BAC when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.