On blogs, on television and radio, in newspapers and magazines, one name this year came to dominate stories about the subprime mortgage mess. In fact, just uttering the word “Countrywide” has become shorthand for the ills ravaging the mortgage industry.
Yet, for all the negative news, for all the disparagement and talk of beneficial loans to the powerful, the adage that there’s no such thing as bad press seems to be holding true. Countrywide Financial Corp. remains the number two mortgage lender for all of Massachusetts.
And its new parent company, Bank of America, is number one. That gives the combined institutions a headlock on mortgage borrowers in the Bay State.
It has been the strength inherent in the BoA brand that has helped Countrywide keep its market share in Massachusetts, according to Matt Vernon, the head of Enterprise Mortgage Sales for the banking giant.
“I think BoA is strong and stable, and that message is ringing true with customers,” Vernon said. “With all of the change of the last 18 months, consumers are telling us it’s more important than ever to have that trust.”
Vernon said since January the bank has tried to change the perception around Countrywide Home Loans.
“We’ve begun a pretty aggressive outreach program [to news outlets] across the country, and messaging around that we are one company with trust and confidence, and we are open for business,” Vernon said. “We have focused on making a very clear message that we are lending and we ready to offer customers responsible products.”
That strategy is sound if consumers actually do associate Countrywide with Bank of America, according to Andrew Rohm, associate professor of marketing at Northeastern University.
“The name Countrywide, for people who know about the company and who have been through difficulties or had bad experiences dealing with them… that name itself is going to illicit a negative reaction,” said Rohm. “Do people associate BoA with Countrywide? If they do, their positive perceptions with BoA will lift their negative perceptions of Countrywide. There is research that shows that a parent brand will influence consumer impressions of the sub brand.”
Others in the mortgage industry say the sheer size of Countrywide has helped it keep market share. Brian Koss, a managing partner of The Mortgage Network, said Countrywide has kept afloat because its huge infrastructure of sales associates was able to absorb the hit.
“They have the largest amount of sales people on the road,” said Koss. “Most of the firms that have gotten a bad name aren’t in the business any more. They are one of the few that has been able to stay in it and deal with this. [They] may be dropping, but the competition is dropping even faster.”
Vernon said that Countrywide’s sales force has been able to tie themselves to BoA’s name and give consumers the stability they seek.
BoA legally took over on July 1, purchasing the troubled lender for $4 billion, and since then the two companies have been “going through a rigid transition process” and merging their products together , Vernon said. The two companies still offer slightly different products and services, but the goal is to emphasize responsible lending.
“We want to be consistent with our brand and focus on the responsible lending industry,” Vernon said. “We have work to do there, but that’s normal from a transition perspective. We are very similar today.”
Koss, of The Mortgage Network, said so many in the home loan industry have been tarred that Countrywide hasn’t had to take the heat all by itself. He asserted that that all mortgage companies, whether they engaged in risky sub-prime lending or not, are being painted with the same broad brush as Countrywide.
“In many ways, its mortgage people in general,” Koss said. “All mortgage companies have the same [sullied] name. It definitely takes more work.”
