I sure don't think it would be a good thing. I am not a real advocate for the government stepping in and helping, but in this case it might be the right thing to do.

This would be horrible, I don't like the rumors but they may be true.

Definitely not a good thing for anyone. I really cannot see this happening despite the signs you mentioned.

I'm a little skeptical myself of Countrywide. Everywhere you look the media says that in 2008 consumers will no longer be able to get loans unless they have stellar credit, and a good chunk of money, as well as a good steady job history. This is not the case with countrywide. With just a 680 and 5% down you can get a no doc loan with a decent interest rate. Is that really much different than before. As far as I know it isn't different at all. Maybe Countrywide just hasn't learned there lesson because they keep getting away with interesting lending practices.

One more downgrade on it's rating and it will be junk.

Monte, I think you are on to something there, though I would say the failure to learn lessons covers the entire spectrum of lending money, including credit cards.  With all the reckless lending practices backed by bait-and-switch loansharking, it's no wonder consumers feel justified gaming the system and declaring BK.  Who gets stuck with the bill?  Those of us who actually pay our mortgages and credit cards because our rates have been inflated to cover recklessness on the part of the lenders.  And when they go bankrupt, our debts will be sold.  The bankrupt lenders won't have to pay anyone (corporate management won't have to give back all the bonus money they looted by gaming the system), but we'll still have to pay what we owe.

Jason, you always bring precise content to your blogs that makes me think.  If Countrywide goes under, it stands to reason that more of the larger banks will pull their wholesale legs out of the business.  That would be bad for the consumer and bad for those of us who depend on the wholesale side of the business.

I remember reading a while back that a lot of people think that BofA will purchase CW.  Only time will tell.

If I rememeber, B of A has already purchased 12 billion dollars worth of stock at $17. With the stock at $6 B Of A just got themselves some additional writedowns.

When their bond rating ticks ONE notch lower, it will be junk rated and pension funds will be obligated to sell off if they haven't already.  This will be the haymaker that hits them in the 11th round.

Rumor has it that Orangelo Mozillo has been vacationing in Dubai and the Emerities, trying to raise about $6billion in the form of a Soveriegn Investment Fund...

...he was trying to keep his identity a secret by dressing in a Berka.

Jason,

Washington is probably working feverishly trying to avoid Countrywide's BK, because that would shake the confidence factor in mortgage lending. The best bet is that someone will buy it out, at a very low price and keep it going. Many thought the buy-out would already happen last fall.

Lender guidlines are getting tighter by the day.  This means there will be less and less people that will qualify for a mortgage.  With the number of mortgage companies currently doing business here in the USA, and a lower number of qualified Buyers- that means consolidation in the mortgage industry as well as real estate Brokers and Agents.

As far as Countrywide itself, I have my mortgages through them and I love their service and their website!  I would hate to see that go away!

Hey Jason.  I'm with Rich, CW is teetering on the brink of destruction (got a good chuckle out of the Mozillo comment).  BOA has to step in and be the python to gobble up this cow or we could see a serious stock market meltdown.  You saw what happened to the DOW today based on the CW rumors; imagine if they were confirmed.  Thanks for the brain teaser.

Hi Jason,
I am not in the mortgage business, just a lowly real estate agent so my knowledge is not as extensive as those of you in the business but the possibility seems real and scary.

Jason, a change is definately coming. the fear of the unknown continously paralyzes the market. We are without a doubt at a turning point in our economic market. I am certain your "canary in the coal mine" is a close parallel to the actual situation.

What I am hearing from my sources is that the BK rumor is only a rumor.  I trust my sources.