Will Countrywide Go Bankrupt?

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.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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