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Bank of America Bails Out Countrywide

Posted Aug 23, 07 6:34 AM CDT in Business,  US 

(Newser) – Countrywide came back from the brink yesterday as Bank of America bought $2 billion in preferred stock in the mortgage company, writes the Los Angeles Times. Countrywide's share price soared in after-hours trading, only a week after the credit crunch brought it to the point of bankruptcy.

BofA's purchase is no charitable handout, though: it gives the bank a sizable chunk—as much as one-sixth—of the nation's largest mortgage lender at a cut-rate price. BofA has long been interested in expanding its presence in the mortgage field and, as one analyst noted, "once the dust settles, the survivors will have much less competition . . . It looks like BofA got a very nice deal."

Source Los Angeles Times

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A Countrywide Banking and Home Loans office is seen in Los Angeles Friday, Aug. 10, 2007. While most of the mortgage market worries so far have focused on the huge losses flowing from the subprime home...   (Associated Press)
Chinatown Bank of America   ((c) patriarca12)
The exterior of the Countrywide home loans office in San Mateo, Calif., Friday, Aug. 17, 2007. It's never been tougher to close a deal than during the past few weeks as lenders have gone bankrupt and...   (Associated Press)
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subprime mortgages  • credit crisis  • Bank of America  • bankruptcy  • Countrywide  • stock


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