Bank of America said that it will begin implementing new lending guidelines following its acquisition of Countrywide Financial. The biggest change will be the fact that the bank will no longer originate subprime mortgages that were the hallmark of the troubled Countrywide. It will also discontinue all nontraditional mortgages where monthly mortgage payments may not cover all interest and will curtail low-documentation loans.

The bank also plans on helping those already affected with such loans. Bank of America said that it would limit prepayment penalties as well as interest-only and hybrid adjustable rate mortgages. It will also provide $35 million in grants and low cost loans to assit loacal and national nonprofits engaged in foreclosure prevention and to purchase vacant single-family homes for neighborhood stabilization. These will be done through the Bank of America Charitable Foundation and Countrywide.

"We think it's important to clearly explain the changes in mortgage lending practices once we operate as a combined company," said Bruce Hammonds, global consumer credit executive at BofA. "We recognize this tightening, by definition, restricts the availability of credit to some borrowers. However, this will help ensure that those who get loans can afford to repay them."