[Coronita]

 

One thing I'd expect to happen if this merger does occur. Ken Lewis will go on a shopping spree to buy other banks with good balance sheets, but nevertheless have been wacked by all the other banking fiascos. This would be used to dilute the toxic waste from CFC with good money from other acquisitions, possibly chopping CFC into pieces to sell. Wouldn't be surprised if after a CFC merger, BofA keep issuing earnings that beat expectations before 'one-time restructuring charges'…They will just happen to take these 'one-time' charges several times over several quarters to the point that no one really cares about or until people stop counting how many of these restructuring charges have been taken.

If I ran into Ken Lewis on the streets right now, I'd ask for his autographed photo. It's very possible our kids will read about him in history books as helping the U.S. out of the Panic of 2007 (if he and BofA pulls if off) 🙂

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

 

One thing I'd expect to happen if this merger does occur. Ken Lewis will go on a shopping spree to buy other banks with good balance sheets, but nevertheless have been wacked by all the other banking fiascos. This would be used to dilute the toxic waste from CFC with good money from other acquisitions, possibly chopping CFC into pieces to sell. Wouldn't be surprised if after a CFC merger, BofA keep issuing earnings that beat expectations before 'one-time restructuring charges'…They will just happen to take these 'one-time' charges several times over several quarters to the point that no one really cares about or until people stop counting how many of these restructuring charges have been taken.

If I ran into Ken Lewis on the streets right now, I'd ask for his autographed photo. It's very possible our kids will read about him in history books as helping the U.S. out of the Panic of 2007 (if he and BofA pulls if off) 🙂

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

 

One thing I'd expect to happen if this merger does occur. Ken Lewis will go on a shopping spree to buy other banks with good balance sheets, but nevertheless have been wacked by all the other banking fiascos. This would be used to dilute the toxic waste from CFC with good money from other acquisitions, possibly chopping CFC into pieces to sell. Wouldn't be surprised if after a CFC merger, BofA keep issuing earnings that beat expectations before 'one-time restructuring charges'…They will just happen to take these 'one-time' charges several times over several quarters to the point that no one really cares about or until people stop counting how many of these restructuring charges have been taken.

If I ran into Ken Lewis on the streets right now, I'd ask for his autographed photo. It's very possible our kids will read about him in history books as helping the U.S. out of the Panic of 2007 (if he and BofA pulls if off) 🙂

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

 

One thing I'd expect to happen if this merger does occur. Ken Lewis will go on a shopping spree to buy other banks with good balance sheets, but nevertheless have been wacked by all the other banking fiascos. This would be used to dilute the toxic waste from CFC with good money from other acquisitions, possibly chopping CFC into pieces to sell. Wouldn't be surprised if after a CFC merger, BofA keep issuing earnings that beat expectations before 'one-time restructuring charges'…They will just happen to take these 'one-time' charges several times over several quarters to the point that no one really cares about or until people stop counting how many of these restructuring charges have been taken.

If I ran into Ken Lewis on the streets right now, I'd ask for his autographed photo. It's very possible our kids will read about him in history books as helping the U.S. out of the Panic of 2007 (if he and BofA pulls if off) 🙂

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

 

One thing I'd expect to happen if this merger does occur. Ken Lewis will go on a shopping spree to buy other banks with good balance sheets, but nevertheless have been wacked by all the other banking fiascos. This would be used to dilute the toxic waste from CFC with good money from other acquisitions, possibly chopping CFC into pieces to sell. Wouldn't be surprised if after a CFC merger, BofA keep issuing earnings that beat expectations before 'one-time restructuring charges'…They will just happen to take these 'one-time' charges several times over several quarters to the point that no one really cares about or until people stop counting how many of these restructuring charges have been taken.

If I ran into Ken Lewis on the streets right now, I'd ask for his autographed photo. It's very possible our kids will read about him in history books as helping the U.S. out of the Panic of 2007 (if he and BofA pulls if off) 🙂

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

argh!!!! Politics is as exciting for me as trying to pass a kidney stone through my sausage….  We're on page 4…

 

…for someone that's not going to win…Yes, that's right. I don't think he's going to win the election. In fact, it would be a blessing for the Republicans if he wins the primary, and not Sen. Clinton… Why? Because there are enough backward-ass, redneck, bible humping, hillbillies in the south and throughout the country (probably even in SD) that would fear anyone that has any suspect muslim blood (real or not). All it would take would be some al qaeda looking dude (real or not) appearing on a web broadcast endorsing obama as a "brother", and that would strike enough fear in these hillbillies to vote against him. In fact, that would be a perfect campaign strategy for the republicans to use.

Same reason why we won't see an asian, hispanic, african american president in the near future.

Sorry.

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

argh!!!! Politics is as exciting for me as trying to pass a kidney stone through my sausage….  We're on page 4…

 

…for someone that's not going to win…Yes, that's right. I don't think he's going to win the election. In fact, it would be a blessing for the Republicans if he wins the primary, and not Sen. Clinton… Why? Because there are enough backward-ass, redneck, bible humping, hillbillies in the south and throughout the country (probably even in SD) that would fear anyone that has any suspect muslim blood (real or not). All it would take would be some al qaeda looking dude (real or not) appearing on a web broadcast endorsing obama as a "brother", and that would strike enough fear in these hillbillies to vote against him. In fact, that would be a perfect campaign strategy for the republicans to use.

Same reason why we won't see an asian, hispanic, african american president in the near future.

Sorry.

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

argh!!!! Politics is as exciting for me as trying to pass a kidney stone through my sausage….  We're on page 4…

 

…for someone that's not going to win…Yes, that's right. I don't think he's going to win the election. In fact, it would be a blessing for the Republicans if he wins the primary, and not Sen. Clinton… Why? Because there are enough backward-ass, redneck, bible humping, hillbillies in the south and throughout the country (probably even in SD) that would fear anyone that has any suspect muslim blood (real or not). All it would take would be some al qaeda looking dude (real or not) appearing on a web broadcast endorsing obama as a "brother", and that would strike enough fear in these hillbillies to vote against him. In fact, that would be a perfect campaign strategy for the republicans to use.

Same reason why we won't see an asian, hispanic, african american president in the near future.

Sorry.

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

argh!!!! Politics is as exciting for me as trying to pass a kidney stone through my sausage….  We're on page 4…

 

…for someone that's not going to win…Yes, that's right. I don't think he's going to win the election. In fact, it would be a blessing for the Republicans if he wins the primary, and not Sen. Clinton… Why? Because there are enough backward-ass, redneck, bible humping, hillbillies in the south and throughout the country (probably even in SD) that would fear anyone that has any suspect muslim blood (real or not). All it would take would be some al qaeda looking dude (real or not) appearing on a web broadcast endorsing obama as a "brother", and that would strike enough fear in these hillbillies to vote against him. In fact, that would be a perfect campaign strategy for the republicans to use.

Same reason why we won't see an asian, hispanic, african american president in the near future.

Sorry.

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

argh!!!! Politics is as exciting for me as trying to pass a kidney stone through my sausage….  We're on page 4…

 

…for someone that's not going to win…Yes, that's right. I don't think he's going to win the election. In fact, it would be a blessing for the Republicans if he wins the primary, and not Sen. Clinton… Why? Because there are enough backward-ass, redneck, bible humping, hillbillies in the south and throughout the country (probably even in SD) that would fear anyone that has any suspect muslim blood (real or not). All it would take would be some al qaeda looking dude (real or not) appearing on a web broadcast endorsing obama as a "brother", and that would strike enough fear in these hillbillies to vote against him. In fact, that would be a perfect campaign strategy for the republicans to use.

Same reason why we won't see an asian, hispanic, african american president in the near future.

Sorry.

 

 

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

Also interesting article…

 

Gov't Seen to Favor Countrywide Buyout

Thursday January 10, 6:34 pm ET
By Alan Zibel, AP Business Writer

A Bank of America Bid for Countrywide Likely Would Get OK From Government, Analysts Say

WASHINGTON (AP) — A buyout of hobbled mortgage lender Countrywide Financial likely would be approved by regulators, analysts say, because otherwise the company could file for bankruptcy, injecting further uncertainty into the home-loan market.

Bank of America Corp. is in talks to acquire Countrywide, The Wall Street Journal and The New York Times reported Thursday online, citing unidentified people familiar with the deal. The transaction would put the country's largest mortgage lender, which has experienced a surge in home-loan defaults and has seen its share price plummet, in the hands of the largest U.S. bank by market capitalization.

A Bank of America-led buyout is "the one and only hope that (Countrywide) has" to avoid bankruptcy, according to Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co. Egan-Jones warned earlier this week that Countrywide could "falter" unless it receives an infusion of $4 billion in capital within the next two weeks.

"I cannot imagine that the regulators want Countrywide to go under," said Bert Ely, a banking industry consultant in Alexandria, Va. "I think they're actually quite nervous about that."

A combination of Bank of America and Countrywide would require approval from the Federal Reserve, and possibly other agencies. Banking regulators declined to comment on the reports.

Federal law bars banks from making acquisitions that would increase a bank's market share to 10 percent of U.S. deposits, and Bank of America is nearing that point at 9.88 percent. However, experts disagreed about whether deposits held by Countrywide's federally regulated thrift, Countrywide Bank, would count toward that limit.

In addition, banking industry experts say Bank of America could easily lower the total amount of money held in deposits by lowering interest rates and losing deposits to competitors.

Federal bank regulators "are not looking to clean up messes like the largest mortgage originator in the country going under," said Bart Nater, a San Francisco-based senior analyst with consulting firm Celent.

Regulators are likely to be far more concerned with whether Countrywide fails — and the economic ramifications of such a large collapse — than with consolidation in the mortgage industry, Nater said.

For the first nine months of 2007, Countrywide was the largest U.S. mortgage lender, while Bank of America ranked fifth, according to trade publication Inside Mortgage Finance. Its publisher, Guy Cecala called the potential deal "by far the most palatable way to resolve Countrywide's problems."

A failure at Countrywide, Cecala said, would have severe ripple effects, including forcing the industry and regulators to figure out who would take on the responsibility of collecting payments for millions of U.S. home loans.

It wasn't clear how quickly a deal might be struck for Countrywide, which has been roiled this week by rumors that a bankruptcy filing was imminent. The Journal reported that negotiations between the two companies could fall apart.

Bank of America, which took on a 16 percent stake in Countrywide over the summer, told The Associated Press it does not comment on market rumor or market speculation. Countrywide did not immediately return calls or e-mails seeking comment.

Countrywide shares climbed $2.63, or 51.4 percent, to close at $7.75 Thursday, while Bank of America shares rose 56 cents, or 1.5 percent, to $39.30.

The New York Stock Exchange said Thursday it asked Countrywide to issue a public statement indicating whether there are any corporate developments that can explain the "unusual" trading activity. The exchange said the Countrywide declined to comment.

Countrywide's stock has plummeted in recent days to record lows amid intensifying anxiety among investors over a continuing surge in defaults and foreclosures afflicting the Calabasas, Calif., lender and others in the mortgage industry.

Last August, the mortgage lender drew on an $11.5 billion line of credit to steady itself.

Bank of America aided Countrywide by buying $2 billion in the form of nonvoting, convertible preferred stock yielding 7.25 percent annually. The shares can be converted into common shares of Countrywide at $18 per share, with certain restrictions.

If Bank of America should convert the shares, it would hold between 16 percent and 17 percent of Countrywide shares. Like other lenders, Countrywide has tightened its credit guidelines and stopped selling some types of adjustable rate loans.

Last month, when asked whether he saw any opportunities to make yet another deal to expand his financial services empire, Bank of America chief executive Ken Lewis casually answered, "Nothing that comes to mind." When asked specifically about Countrywide, Lewis said he would have "to eat about seven years of my words" if he ever made a deal in the mortgage industry.

AP Business Writers Alex Veiga in Los Angeles and Ieva Augstums in Charlotte contributed to this report.

 

[Coronita]

Also interesting article…

 

Gov't Seen to Favor Countrywide Buyout

Thursday January 10, 6:34 pm ET
By Alan Zibel, AP Business Writer

A Bank of America Bid for Countrywide Likely Would Get OK From Government, Analysts Say

WASHINGTON (AP) — A buyout of hobbled mortgage lender Countrywide Financial likely would be approved by regulators, analysts say, because otherwise the company could file for bankruptcy, injecting further uncertainty into the home-loan market.

Bank of America Corp. is in talks to acquire Countrywide, The Wall Street Journal and The New York Times reported Thursday online, citing unidentified people familiar with the deal. The transaction would put the country's largest mortgage lender, which has experienced a surge in home-loan defaults and has seen its share price plummet, in the hands of the largest U.S. bank by market capitalization.

A Bank of America-led buyout is "the one and only hope that (Countrywide) has" to avoid bankruptcy, according to Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co. Egan-Jones warned earlier this week that Countrywide could "falter" unless it receives an infusion of $4 billion in capital within the next two weeks.

"I cannot imagine that the regulators want Countrywide to go under," said Bert Ely, a banking industry consultant in Alexandria, Va. "I think they're actually quite nervous about that."

A combination of Bank of America and Countrywide would require approval from the Federal Reserve, and possibly other agencies. Banking regulators declined to comment on the reports.

Federal law bars banks from making acquisitions that would increase a bank's market share to 10 percent of U.S. deposits, and Bank of America is nearing that point at 9.88 percent. However, experts disagreed about whether deposits held by Countrywide's federally regulated thrift, Countrywide Bank, would count toward that limit.

In addition, banking industry experts say Bank of America could easily lower the total amount of money held in deposits by lowering interest rates and losing deposits to competitors.

Federal bank regulators "are not looking to clean up messes like the largest mortgage originator in the country going under," said Bart Nater, a San Francisco-based senior analyst with consulting firm Celent.

Regulators are likely to be far more concerned with whether Countrywide fails — and the economic ramifications of such a large collapse — than with consolidation in the mortgage industry, Nater said.

For the first nine months of 2007, Countrywide was the largest U.S. mortgage lender, while Bank of America ranked fifth, according to trade publication Inside Mortgage Finance. Its publisher, Guy Cecala called the potential deal "by far the most palatable way to resolve Countrywide's problems."

A failure at Countrywide, Cecala said, would have severe ripple effects, including forcing the industry and regulators to figure out who would take on the responsibility of collecting payments for millions of U.S. home loans.

It wasn't clear how quickly a deal might be struck for Countrywide, which has been roiled this week by rumors that a bankruptcy filing was imminent. The Journal reported that negotiations between the two companies could fall apart.

Bank of America, which took on a 16 percent stake in Countrywide over the summer, told The Associated Press it does not comment on market rumor or market speculation. Countrywide did not immediately return calls or e-mails seeking comment.

Countrywide shares climbed $2.63, or 51.4 percent, to close at $7.75 Thursday, while Bank of America shares rose 56 cents, or 1.5 percent, to $39.30.

The New York Stock Exchange said Thursday it asked Countrywide to issue a public statement indicating whether there are any corporate developments that can explain the "unusual" trading activity. The exchange said the Countrywide declined to comment.

Countrywide's stock has plummeted in recent days to record lows amid intensifying anxiety among investors over a continuing surge in defaults and foreclosures afflicting the Calabasas, Calif., lender and others in the mortgage industry.

Last August, the mortgage lender drew on an $11.5 billion line of credit to steady itself.

Bank of America aided Countrywide by buying $2 billion in the form of nonvoting, convertible preferred stock yielding 7.25 percent annually. The shares can be converted into common shares of Countrywide at $18 per share, with certain restrictions.

If Bank of America should convert the shares, it would hold between 16 percent and 17 percent of Countrywide shares. Like other lenders, Countrywide has tightened its credit guidelines and stopped selling some types of adjustable rate loans.

Last month, when asked whether he saw any opportunities to make yet another deal to expand his financial services empire, Bank of America chief executive Ken Lewis casually answered, "Nothing that comes to mind." When asked specifically about Countrywide, Lewis said he would have "to eat about seven years of my words" if he ever made a deal in the mortgage industry.

AP Business Writers Alex Veiga in Los Angeles and Ieva Augstums in Charlotte contributed to this report.

 

[Coronita]

Also interesting article…

 

Gov't Seen to Favor Countrywide Buyout

Thursday January 10, 6:34 pm ET
By Alan Zibel, AP Business Writer

A Bank of America Bid for Countrywide Likely Would Get OK From Government, Analysts Say

WASHINGTON (AP) — A buyout of hobbled mortgage lender Countrywide Financial likely would be approved by regulators, analysts say, because otherwise the company could file for bankruptcy, injecting further uncertainty into the home-loan market.

Bank of America Corp. is in talks to acquire Countrywide, The Wall Street Journal and The New York Times reported Thursday online, citing unidentified people familiar with the deal. The transaction would put the country's largest mortgage lender, which has experienced a surge in home-loan defaults and has seen its share price plummet, in the hands of the largest U.S. bank by market capitalization.

A Bank of America-led buyout is "the one and only hope that (Countrywide) has" to avoid bankruptcy, according to Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co. Egan-Jones warned earlier this week that Countrywide could "falter" unless it receives an infusion of $4 billion in capital within the next two weeks.

"I cannot imagine that the regulators want Countrywide to go under," said Bert Ely, a banking industry consultant in Alexandria, Va. "I think they're actually quite nervous about that."

A combination of Bank of America and Countrywide would require approval from the Federal Reserve, and possibly other agencies. Banking regulators declined to comment on the reports.

Federal law bars banks from making acquisitions that would increase a bank's market share to 10 percent of U.S. deposits, and Bank of America is nearing that point at 9.88 percent. However, experts disagreed about whether deposits held by Countrywide's federally regulated thrift, Countrywide Bank, would count toward that limit.

In addition, banking industry experts say Bank of America could easily lower the total amount of money held in deposits by lowering interest rates and losing deposits to competitors.

Federal bank regulators "are not looking to clean up messes like the largest mortgage originator in the country going under," said Bart Nater, a San Francisco-based senior analyst with consulting firm Celent.

Regulators are likely to be far more concerned with whether Countrywide fails — and the economic ramifications of such a large collapse — than with consolidation in the mortgage industry, Nater said.

For the first nine months of 2007, Countrywide was the largest U.S. mortgage lender, while Bank of America ranked fifth, according to trade publication Inside Mortgage Finance. Its publisher, Guy Cecala called the potential deal "by far the most palatable way to resolve Countrywide's problems."

A failure at Countrywide, Cecala said, would have severe ripple effects, including forcing the industry and regulators to figure out who would take on the responsibility of collecting payments for millions of U.S. home loans.

It wasn't clear how quickly a deal might be struck for Countrywide, which has been roiled this week by rumors that a bankruptcy filing was imminent. The Journal reported that negotiations between the two companies could fall apart.

Bank of America, which took on a 16 percent stake in Countrywide over the summer, told The Associated Press it does not comment on market rumor or market speculation. Countrywide did not immediately return calls or e-mails seeking comment.

Countrywide shares climbed $2.63, or 51.4 percent, to close at $7.75 Thursday, while Bank of America shares rose 56 cents, or 1.5 percent, to $39.30.

The New York Stock Exchange said Thursday it asked Countrywide to issue a public statement indicating whether there are any corporate developments that can explain the "unusual" trading activity. The exchange said the Countrywide declined to comment.

Countrywide's stock has plummeted in recent days to record lows amid intensifying anxiety among investors over a continuing surge in defaults and foreclosures afflicting the Calabasas, Calif., lender and others in the mortgage industry.

Last August, the mortgage lender drew on an $11.5 billion line of credit to steady itself.

Bank of America aided Countrywide by buying $2 billion in the form of nonvoting, convertible preferred stock yielding 7.25 percent annually. The shares can be converted into common shares of Countrywide at $18 per share, with certain restrictions.

If Bank of America should convert the shares, it would hold between 16 percent and 17 percent of Countrywide shares. Like other lenders, Countrywide has tightened its credit guidelines and stopped selling some types of adjustable rate loans.

Last month, when asked whether he saw any opportunities to make yet another deal to expand his financial services empire, Bank of America chief executive Ken Lewis casually answered, "Nothing that comes to mind." When asked specifically about Countrywide, Lewis said he would have "to eat about seven years of my words" if he ever made a deal in the mortgage industry.

AP Business Writers Alex Veiga in Los Angeles and Ieva Augstums in Charlotte contributed to this report.

 

[Coronita]

Also interesting article…

 

Gov't Seen to Favor Countrywide Buyout

Thursday January 10, 6:34 pm ET
By Alan Zibel, AP Business Writer

A Bank of America Bid for Countrywide Likely Would Get OK From Government, Analysts Say

WASHINGTON (AP) — A buyout of hobbled mortgage lender Countrywide Financial likely would be approved by regulators, analysts say, because otherwise the company could file for bankruptcy, injecting further uncertainty into the home-loan market.

Bank of America Corp. is in talks to acquire Countrywide, The Wall Street Journal and The New York Times reported Thursday online, citing unidentified people familiar with the deal. The transaction would put the country's largest mortgage lender, which has experienced a surge in home-loan defaults and has seen its share price plummet, in the hands of the largest U.S. bank by market capitalization.

A Bank of America-led buyout is "the one and only hope that (Countrywide) has" to avoid bankruptcy, according to Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co. Egan-Jones warned earlier this week that Countrywide could "falter" unless it receives an infusion of $4 billion in capital within the next two weeks.

"I cannot imagine that the regulators want Countrywide to go under," said Bert Ely, a banking industry consultant in Alexandria, Va. "I think they're actually quite nervous about that."

A combination of Bank of America and Countrywide would require approval from the Federal Reserve, and possibly other agencies. Banking regulators declined to comment on the reports.

Federal law bars banks from making acquisitions that would increase a bank's market share to 10 percent of U.S. deposits, and Bank of America is nearing that point at 9.88 percent. However, experts disagreed about whether deposits held by Countrywide's federally regulated thrift, Countrywide Bank, would count toward that limit.

In addition, banking industry experts say Bank of America could easily lower the total amount of money held in deposits by lowering interest rates and losing deposits to competitors.

Federal bank regulators "are not looking to clean up messes like the largest mortgage originator in the country going under," said Bart Nater, a San Francisco-based senior analyst with consulting firm Celent.

Regulators are likely to be far more concerned with whether Countrywide fails — and the economic ramifications of such a large collapse — than with consolidation in the mortgage industry, Nater said.

For the first nine months of 2007, Countrywide was the largest U.S. mortgage lender, while Bank of America ranked fifth, according to trade publication Inside Mortgage Finance. Its publisher, Guy Cecala called the potential deal "by far the most palatable way to resolve Countrywide's problems."

A failure at Countrywide, Cecala said, would have severe ripple effects, including forcing the industry and regulators to figure out who would take on the responsibility of collecting payments for millions of U.S. home loans.

It wasn't clear how quickly a deal might be struck for Countrywide, which has been roiled this week by rumors that a bankruptcy filing was imminent. The Journal reported that negotiations between the two companies could fall apart.

Bank of America, which took on a 16 percent stake in Countrywide over the summer, told The Associated Press it does not comment on market rumor or market speculation. Countrywide did not immediately return calls or e-mails seeking comment.

Countrywide shares climbed $2.63, or 51.4 percent, to close at $7.75 Thursday, while Bank of America shares rose 56 cents, or 1.5 percent, to $39.30.

The New York Stock Exchange said Thursday it asked Countrywide to issue a public statement indicating whether there are any corporate developments that can explain the "unusual" trading activity. The exchange said the Countrywide declined to comment.

Countrywide's stock has plummeted in recent days to record lows amid intensifying anxiety among investors over a continuing surge in defaults and foreclosures afflicting the Calabasas, Calif., lender and others in the mortgage industry.

Last August, the mortgage lender drew on an $11.5 billion line of credit to steady itself.

Bank of America aided Countrywide by buying $2 billion in the form of nonvoting, convertible preferred stock yielding 7.25 percent annually. The shares can be converted into common shares of Countrywide at $18 per share, with certain restrictions.

If Bank of America should convert the shares, it would hold between 16 percent and 17 percent of Countrywide shares. Like other lenders, Countrywide has tightened its credit guidelines and stopped selling some types of adjustable rate loans.

Last month, when asked whether he saw any opportunities to make yet another deal to expand his financial services empire, Bank of America chief executive Ken Lewis casually answered, "Nothing that comes to mind." When asked specifically about Countrywide, Lewis said he would have "to eat about seven years of my words" if he ever made a deal in the mortgage industry.

AP Business Writers Alex Veiga in Los Angeles and Ieva Augstums in Charlotte contributed to this report.

 

[Coronita]

Also interesting article…

 

Gov't Seen to Favor Countrywide Buyout

Thursday January 10, 6:34 pm ET
By Alan Zibel, AP Business Writer

A Bank of America Bid for Countrywide Likely Would Get OK From Government, Analysts Say

WASHINGTON (AP) — A buyout of hobbled mortgage lender Countrywide Financial likely would be approved by regulators, analysts say, because otherwise the company could file for bankruptcy, injecting further uncertainty into the home-loan market.

Bank of America Corp. is in talks to acquire Countrywide, The Wall Street Journal and The New York Times reported Thursday online, citing unidentified people familiar with the deal. The transaction would put the country's largest mortgage lender, which has experienced a surge in home-loan defaults and has seen its share price plummet, in the hands of the largest U.S. bank by market capitalization.

A Bank of America-led buyout is "the one and only hope that (Countrywide) has" to avoid bankruptcy, according to Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co. Egan-Jones warned earlier this week that Countrywide could "falter" unless it receives an infusion of $4 billion in capital within the next two weeks.

"I cannot imagine that the regulators want Countrywide to go under," said Bert Ely, a banking industry consultant in Alexandria, Va. "I think they're actually quite nervous about that."

A combination of Bank of America and Countrywide would require approval from the Federal Reserve, and possibly other agencies. Banking regulators declined to comment on the reports.

Federal law bars banks from making acquisitions that would increase a bank's market share to 10 percent of U.S. deposits, and Bank of America is nearing that point at 9.88 percent. However, experts disagreed about whether deposits held by Countrywide's federally regulated thrift, Countrywide Bank, would count toward that limit.

In addition, banking industry experts say Bank of America could easily lower the total amount of money held in deposits by lowering interest rates and losing deposits to competitors.

Federal bank regulators "are not looking to clean up messes like the largest mortgage originator in the country going under," said Bart Nater, a San Francisco-based senior analyst with consulting firm Celent.

Regulators are likely to be far more concerned with whether Countrywide fails — and the economic ramifications of such a large collapse — than with consolidation in the mortgage industry, Nater said.

For the first nine months of 2007, Countrywide was the largest U.S. mortgage lender, while Bank of America ranked fifth, according to trade publication Inside Mortgage Finance. Its publisher, Guy Cecala called the potential deal "by far the most palatable way to resolve Countrywide's problems."

A failure at Countrywide, Cecala said, would have severe ripple effects, including forcing the industry and regulators to figure out who would take on the responsibility of collecting payments for millions of U.S. home loans.

It wasn't clear how quickly a deal might be struck for Countrywide, which has been roiled this week by rumors that a bankruptcy filing was imminent. The Journal reported that negotiations between the two companies could fall apart.

Bank of America, which took on a 16 percent stake in Countrywide over the summer, told The Associated Press it does not comment on market rumor or market speculation. Countrywide did not immediately return calls or e-mails seeking comment.

Countrywide shares climbed $2.63, or 51.4 percent, to close at $7.75 Thursday, while Bank of America shares rose 56 cents, or 1.5 percent, to $39.30.

The New York Stock Exchange said Thursday it asked Countrywide to issue a public statement indicating whether there are any corporate developments that can explain the "unusual" trading activity. The exchange said the Countrywide declined to comment.

Countrywide's stock has plummeted in recent days to record lows amid intensifying anxiety among investors over a continuing surge in defaults and foreclosures afflicting the Calabasas, Calif., lender and others in the mortgage industry.

Last August, the mortgage lender drew on an $11.5 billion line of credit to steady itself.

Bank of America aided Countrywide by buying $2 billion in the form of nonvoting, convertible preferred stock yielding 7.25 percent annually. The shares can be converted into common shares of Countrywide at $18 per share, with certain restrictions.

If Bank of America should convert the shares, it would hold between 16 percent and 17 percent of Countrywide shares. Like other lenders, Countrywide has tightened its credit guidelines and stopped selling some types of adjustable rate loans.

Last month, when asked whether he saw any opportunities to make yet another deal to expand his financial services empire, Bank of America chief executive Ken Lewis casually answered, "Nothing that comes to mind." When asked specifically about Countrywide, Lewis said he would have "to eat about seven years of my words" if he ever made a deal in the mortgage industry.

AP Business Writers Alex Veiga in Los Angeles and Ieva Augstums in Charlotte contributed to this report.

 

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