Sunday, January 13, 2008

Beat-up mortgage lender offered a new home

Becky Yerak writes:

Bank of America, which made a big splash in Chicago last October with its $21 billion purchase of LaSalle Bank, struck another blockbuster deal Friday when it agreed to buy distressed Countrywide Financial Corp. for $4 billion.

The proposed acquisition of Countrywide -- the biggest mortgage lender both nationally and in the Chicago area -- averts what could have been another major setback for the housing and financial markets. Rumors swirled this week that Countrywide was heading for bankruptcy court.

While banks and brokerages continue to write down bad mortgage investments, the failure of a brand as synonymous with mortgages as Countrywide would have dealt a psychological blow to investors and put further pressure on real estate markets nationally.

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