Snappy newsletters. Simple Facebook sharing. Spirited comments. Sweet features are waiting… GET THEM NOW!

Hot on Facebook
Guy Buys $123 Safe on eBay, Finds $26,000 Inside Seller tries to get half the cash back, fails »

Bank of America Bails Out Countrywide

Lender avoids disaster as bank buys $2 billion in cut-rate shares

By Jason Farago,  Newser Staff

Posted Aug 23, 2007 6:34 AM CDT
Email

(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."

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 loans made to people with bad credit, the option and interest-only ARMs held by...
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
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 the skittish survivors become more discriminating to avoid further trouble. The credit mess forced...
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)
« Prev« Prev | Next »Next » Slideshow
To report an error on this story, notify our editors.
A snapshot of the day's best news stories.
 
COMMENTS
Be the first to comment on this story.

Forbes on how banks are trying to end the crisis
Forbes

US • Money

 
Bank of America • bankruptcy • subprime mortgages • stock • Countrywide • credit crisis

More Newser Stories

BofA May Buy Ailing Countrywide

Credit Crunch Continues, and So Do Ads

Loan Giant Downgraded to 'Sell,' Faces Bankruptcy

This Woman's Job: to Make You Like BofA

BofA Pays $335M to Settle Claims Over Minority Loans
NEWS FROM OUR PARTNERS
Other Sites We Like:   24/7 Wall St.   |   Betty Confidential   |   BuzzFeed   |   Cracked   |   Fark   |   Timelines   |   The Frisky   |   Geek Sugar   |   NewsOne