Bank of America made some terrible acquisitions in 2007 — particularly Merrill Lynch and Countrywide. These purchases have cost the bank many billions of dollars more than they initially budgeted.
Countrywide in particular is just a sink hole. The losses keep getting bigger. Countrywide did not seem to pay much attention to whether or not those taking out their mortgage could afford to pay them back.
Why didn’t Countrywide care? Because it quickly resold most mortgages upon making them.
Reuters reports: Bank of America Corp has considered putting its Countrywide mortgage assets into bankruptcy to staunch the bleeding from the loans, but such a move would face so many obstacles that it is unlikely to happen.
Brian Moynihan, the bank’s chief executive, is looking for ways to stabilize Bank of America’s falling stock price as worries grow that Countrywide has become a bottomless money pit — especially after Monday’s $10 billion lawsuit filed by American International Group Inc.
In a call with investors on Wednesday, Bruce Berkowitz, a major Bank of America investor, asked Moynihan about the possibility of its Countrywide unit filing for bankruptcy.