This weekend marks four years since Bank of America Corp. completed its acquisition of struggling mortgage lender Countrywide Financial Corp., a deal that remains the source of some of the Charlotte lender's biggest problems.
"There are not many days when I get up and think positively about the
Countrywide transaction," chief executive Brian Moynihan said during a
conference call with investors last August.
Bank of America has lost more than $40 billion in legal expenses, real estate losses and settlements with government agencies since it bought Countrywide in 2008 for $2.5 billion, the Wall Street Journal wrote today. In a story last summer, the Observer detailed those hits.
"You have to put it down as one of the worst (deals) in history," Gary Townsend of Maryland investment firm Hill-Townsend Capital told the Observer at the time.
Now, bank officials say they are modifying mortgages, working through legal problems and otherwise moving past the Countrywide-related troubles.
Bank of America's earnings have improved in recent quarters, and its
stock price is up more than 45 percent for the year after a steep fall
in 2011.
Bank of America became a national powerhouse by snapping up rivals through a series of mergers under former CEOs Hugh McColl Jr. and Ken Lewis. Its involvement with Countrywide began with a $2 billion investment in August 2007. By January 2008, Lewis agreed to buy the whole company, part of a push to become No. 1 in major consumer banking businesses, from credit cards to mortgages.
"We view this as a one-time opportunity," Lewis said during a conference call announcing the deal, "to acquire the best mortgage platform in the business at a time when the value is very attractive."
Friday, June 29, 2012
BofA's Countrywide troubles remain, four years later
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15 comments:
CountryWide catered to trash and welfare scum - therein lies the link to every single problem with the Company.
Lewis got a huge "retirement" package after orchestrating one of the most stupid moves in the history of American business. And it happened right here in NASCAR VAlley!!What a joke
I started out with a home loan that got bought by Countrywide. Now with BoA. I have never been late on a payment and I have good credit and my wife and I both have decent jobs.
@ 3:54,
Ken Lewis would thank you from the bottom of his private jet you bought him.
Countrywide, wholly owned by Democrats that gave sweetheart loans to Chris Dodd one of the most corrupt snakes in Congress wh along with Barney "the moron" Frank crafted the Frank/Dodd bill yet another bill that no one read that is having a devasting impact on the banking industry.. Yep, you libs are the smart voters alright.
So, you believe "welfare scum" is the root of the problem? No, my confused friend. The root of the problem is good ol' fashion GREED!
Banks lobbied for and eventually GOT deregulation. They wrote loans to people (rich and poor) who couldn't afford those loans...and they KNEW those people may not be able to afford them.
Then, if that wasn't enough, they rolled these bad loans into other financial instruments and SOLD THEM again...now the failed mortgage loan affects the original lender, the borrower, the borrower's neighbors, and all the mutual funds, IRA's, etc that included those bad financial instruments.
But, as always, it's easy to blame the poor; it's harder to expect more from individuals who are smarter, richer, and should KNOW BETTER!
@ Anon 7:37,
It's nice to see someone educated on the subject finally commenting on these types of articles regarding finance and the crisis. People need to educate them on the full story behind the crisis and not just blindly follow the typical party line. This is not about liberal versus conservative, democrats and republicans, because both parties contributed to this catastrophe. From the repeal of Glass-Steagall and the deregulation of the credit derivatives market to the bailouts of Bear Stears, AIG, etc. and the corporate greed that still exists today because the governement refuses to reform Wall Street, due in large part to the massive wealth and dominance of the financial lobby, Main Street America (you, I and the rest of the 90%) will continue to suffer more and more each year because of the decisions made by our elected officials and by the rest of the 10% whose unholy goal it seems is to enslave us by financially crippling the 'minions' while hoarding all the gold for themselves.
Sounds like you speak from experience. Takes trash to know trash...
@3:48 what does NASCAR have to do with this... dumb comment. Nevermind it is in Concord...
I'm surprised BofA is still around. The place (institution) is a joke.
@7:37. How did banks knowingly lend to "rich people who couldnt afford them"... they were RICH. If the banks were greedy for making loans to people who they knee couldnt afford them wouldnt have people who knee they couldnt afford the house and the investor who knew the buyer couldnt afford the house be greedy and also be to blame.
Not sure why BofA continues to get negative comments regardng it's bank. Allright, to be accurate the countrywide buy was a mistake - no one could have predicted this housing crisis would be this severe for this long. Beng in the industry, it's clear this situation is long from over. But the bank is a good bank to be work with, has by far the best online and atm network, has "real" people that pick up the phone and work with you and are a lot more forgiving than "screw you" Wells Fargo or FITB> If you know anything about retail banking - you would know they are still the best at what they do - I'm happy to have them as a bank.
Skippy, Skippy, Skippy, I know that your Momma taught you better but all of that hate you show is because she left you alone too much. Maybe she was trying to tell you something when she put a collar on you and left your dog sleep in your bed.
P.S. That "Don't Tread On Me" flag really looks good flying above your trailer.
I got a mortgage with Countrywide in 2003 based on my income as a self employed contractor. I am still struggling with this economy. Yet BOA will not refinance my loan of 6.12 percent even though I have made all my payments and also have almost enough money in the bank to pay off the loan. BOA is the worst group of people I have ever encountered.
Ken Lewis will go down in history as the worst CEO EVER.
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