Today there were several reports that came out in the main stream press that Bank of America is very close to completing a deal to acquire Countrywide, possibly as soon as tomorrow.  This immediately popped their beaten down stock price by about 64%.

My prediction when Countrywide took $2B in financing from BofA early in the fall was that, Bank of America would end up acquiring Countrywide's servicing portfolio (and name) either in a take-under or during bankruptcy.  Countrywide's servicing portfolio has substantial value and they still have a decent brand name, though it's substantially damaged as of late.  But, they also have potentially tens of billions in liabilities on their books in bad loans and the inevitable lawsuits.  Essentially Countrywides real value is probably negative, by A LOT and Bank of America surely knows this and would not want to take on the liabilities themselves.

So if these reported rumors are true the two most likely scenarios is Bank of America will do a take under, essentially purchasing the servicing portfolio and name, leaving the toxic investment portfolio and bank in a shell (a take-under).  Or Countrywide will file for bankruptcy and Bank of America use their preferred stock holder position to pick over the carcass for any assets they want (servicing portfolio and name).  That's my analysis of the situation anyways...