Reuters
reports that Bank of America is buying Countrywide for $4 billion.
The purchase marks another acquisition for Bank of America Chief Executive Kenneth Lewis, who has spent more than $100 billion since 2004 to create the second-largest U.S. bank and the nation's largest consumer bank.
It also provide's a lifeline for Countrywide, which became a poster child for what critics say were lending excesses that fueled the housing and credit meltdown.
The largest U.S. mortgage lender has been convulsed by mounting losses and defaults, a loss of access to credit markets, and a slew of lawsuits and regulatory probes into its lending practices and Chief Executive Angelo Mozilo's pay. On Tuesday, it denied rumors that it might go bankrupt.
Countrywide has been hit very hard by the housing and credit problems. The deal is a big save for them and their shareholders but there are questions about what it means for Bank of America. SeekingAlpha
says Bank of America will lose billions in the deal to acquire Countrywide. The
Economist calls BofA's purchase a
big gamble. Time will tell but it does sound like a risky acquisition.
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