BofA May Buy Ailing Countrywide

Talks between bank and troubled mortgage giant well advanced
By Caroline Zimmerman,  Newser User
Posted Jan 10, 2008 3:21 PM CST
Ian Stewart, right, and Gregory Gravalis, both of Bear Wagner Specialists, monitor trading on the floor of the New York Stock Exchange, Thursday, Jan. 10, 2008. Wall Street rose in volatile trading on...   (Associated Press)
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(Newser) – Bank of America is in advanced talks to buy troubled Countrywide, the Wall Street Journal reports. The Charlotte-based bank could be on the brink of acquiring the US' largest mortgage lender, whose market value has plummeted to $3 billion—about 2 months' profit for BofA—as foreclosures continue to dent profits. It's still unclear if the Federal Reserve would approve of an even-more-giant BofA, the second largest bank in the nation.

Bank of America holds a 16% stake in Countrywide after buying $2 billion in preferred shares this summer—and earning right of first refusal in a sale. But the deal could give BofA more than the 10% of US deposits allowed to one institution under federal law. Countrywide shares rose 74% today on the publication of the Journal story, Bloomberg reports.