NEW YORK (CNNMoney.com) — Bank of America came to the rescue Friday of embattled mortgage lender Countrywide Financial Corp., saying it would buy the company for $4 billion in an all-stock transaction. Wall Street, which embraced speculation about such a deal just a day earlier, was not encouraged about the news as Countrywide (CFC, Fortune 500) shares tumbled 13 percent in pre-market trading. … The deal, which is expected to be completed in the second half of 2008, would make Bank of the America the nation’s largest mortgage lender.
Late last summer, the pair struck a deal in which Bank of America would provide $2 billion in financing to Countrywide in exchange for a 16 percent stake in the company. But Countrywide has experienced mounting woes recently, reporting rising delinquencies and foreclosures within its loan portfolio in December. Speculation also surfaced earlier this week that Countrywide was planning to file for bankruptcy itself. Countrywide later denied that rumor.
Lately, there has been much speculation about where the mortgage market is headed, especially where lenders whose primary focus is on the banking side is concerned. With Bank of America folding their wholesale mortgage division into retail, and now with them purchasing basically a new wholesale platform, who knows what the future holds? One thing is for sure, Texas Mortgage Team and Texas Home Central will be here to guide you through your transaction with your best interests in mind.
Craig Pollard is a mortgage professional and owner of Texas Mortgage Team. He specializes in the Dallas Fort Worth area and is a frequent voice on Texas Home Central’s blog. Craig can be reached at CPollard@Texasmt.com or 972-317-9900
Tags: Bank of America buys Countrywide, Mortgage Market
This entry was posted on Friday, January 11th, 2008 at 12:26 am and is filed under Money Matters. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.