I had a dream the other evening.  I was watching CNBC the other night.  A story came on about Countrywide home loans.  The reporter was talking about the proposed company purchase from Bank Of America.  As the reporter was making her point all I could think of was how much trouble Countrywide was in.  Granted the bail out from BOA can buoy Countrywide assets for some time while the new merged company makes plans to save itself.  Here is one scenario that scared me.  Countrywide owns something like 1 out of every 6 home loans out there (double check my numbers).  What if BOA decided that they didn't want to acquire Countrywide REO's.  What if they wanted Countrywide to liquidate their assets for let's say 30 - 40 cents on the dollar.  With all the REO's out there drastically reduced can you imagine what that would do to comps in each neighborhood.  I would think it would be a measureable drag down of home prices.  Like the sinking titanic, Countrywide could take many down to the depths of foreclosure.  Many would be "upside down" in their homes even without subprime loans. 

  Wow, I am glad it was just a dream, or nightmare rather!