The purchase marks another acquisition for Bank of America Chief Executive Kenneth Lewis, who has spent more than $100 billion since 2004 to create the second-largest US bank and the nation's largest consumer bank. It also provides a lifeline for Countrywide, which became a poster child for what critics say were lending excesses that fuelled the housing and credit meltdown. The largest US mortgage lender has been convulsed by mounting losses and defaults, a loss of access to credit markets, and a slew of lawsuits and regulatory probes into its lending practices and Chief Executive Angelo Mozilo’s pay.

Both,together would make about one in four US mortgage loans, roughly twice as many as Wells Fargo & Co, the nearest rival.