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Countrywide to be acquired by Bank of America

Main / Meridian Homes for Sale

With the mortgage meltdown, it appears even this industry icon couldn't withstand the heat.

The only thing constant in the world these days appears to be "change". Over the past 40 years, Countrywide was enabled approximately 20 million buyers to acheive the dream of homeownership. With the mortgage meltdown, it appears even this industry icon couldn't withstand the heat.

With the recent announcement of Bank of America's current efforts to acquire Countrywide, this will create one of the most powerful mortgage institutions in the world! Bank of America plans to operate Countywide as a separate brand and the intergration will not occur until "no sooner than 2009" and still has to be blessed by their shareholders and the Securities and Exchange Commission.

Kim Willoughby, Home Loan Manager and Mortgage Planner with the Emerald Branch of Countrywide here in Boise, said "First of all: MY JOB IS SECURE AND I AM VERY, VERY HAPPY WITH THIS NEWS!" Kim says that right now it is "business as usual" at Countrywide. She has reassured her clients and business partners that "Your loans will not be changing! You have a recorded deed of trust that outlines the terms of your loans, and the acquisition will not change that. You can rest assured that you will continue to have the same great service you have had in the past! So . . . final words . . . GAME ON!!!

It will be interesting to see how the shareholders and the SEC respond to this. Any time you merge two large companies, you gain tremendous economies of scale. There will certainly be some bumps in the road as they sort out all the details.

I have responded to several blogs on this site regarding "short sales" and "foreclosures" and never imagined I would be doing one somewhat similar on Countrywide!

Posted by Jim Paulson at 1/14/2008 12:08 PM

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Comments (6)

Re:Countrywide to be acquired by Bank of America

My bet is no way this closes. It is scheduled for 6 months from now, but look for the 'conditional clauses'. Shoted BAC and CFC on the news. Would not see regulators sweating the deal though...whisper is the FED pushed this to avoid a high profile CFC bankruptcy.

Posted by emdeplam on 1/14/2008 2:40 PM

Re:Countrywide to be acquired by Bank of America

Now that Countrywide has been sold at 20% of its value from one year ago, Do you think BAC will rework the sub-prime loans that it bought at a bargain price 20cents on the dollar. Convert those subprime interest rates down from 12.5% to even 9% and fix the rate and you can end the crisis and cut down on the foreclosures. Stop the foreclosures and you save the real estate market. Stop the real estate crisis and start building again producing jobs and increasing sending and stop the recession. Not going to happen, those sup prime loans are leveraged to the max. Countrywide will drag BAC down with it. Maybe when it is all said and done there will be affordable housing that is worth living in.

Posted by Anonymous on 1/15/2008 8:00 AM

Re:Countrywide to be acquired by Bank of America

I wish I could buy my loan at 20 cents on the dollar. Problem is that BAC/CFC used the assets (your mortgage) and leveraged it 10 to 1, sold to hedge funds who levered 10 to 1. Haha... ponzi scheme!

With the write downs BAC WILL NOT meet capital requirements to lend like they have in the past. Lending must slow,

And IMHO most of the subprime borrowers cant afford their loans at any rate. They were betting on home appreciation...When you owe more than its worth the keys will be mailed back

Posted by emdeplam on 1/16/2008 4:17 AM

Re:Countrywide to be acquired by Bank of America

I think people who organize purchases of businesses like Countrywide have done their homework and have had all kinds of advice from colleagues and cynics. I would guess business people putting down that much have done their homework. Admittedly they may make the people at the bottom pay but they have done their homework. Nothing personal just business.

Posted by tlangford on 1/16/2008 2:26 PM

Re:Countrywide to be acquired by Bank of America

Keep in mind that this acquisition/merger has yet to be approved! If it doesn't pencil out for the SEC and the shareholders, it won't go through (which could be disasterous for Countrywide). When companies need cash and debt relief, fire sales happen - even to the big boys!

Look at the old Morrison Knudsen Corp (then Washington Group, now URS) when they needed cash, the sold their entire headquarters complex in Boise for less than the construction cost of their most recent building phase alone! Look at Micron, their stock is trading at 42% of what it was this time last year!

Posted by Jim Paulson on 1/16/2008 5:45 PM

Re:Countrywide to be acquired by Bank of America

Per 'doing their homework"... this is the same BofA that invested 2 BILLION in CFC at $20 per share and now are admitting (via a purchase) that it is only worth $6. Thats not great homework...unless the bet hard on the short side at the same time! My bets are a CFC bankruptcy as the deal falls apart,...BAC gets perferred creditor status and takes the origination assets....the taxpayers get the funny paper :-)

Posted by emdeplam on 1/17/2008 3:50 AM

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