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.