An article by Goldstein stated that Charlotte, N.C.-based Bank of America has reached an agreement to acquire Countrywide Financial. This would position them as the biggest mortgage originator and servicer in the United States. The $4 billion stock transaction, slated to close in the third quarter, calls for each Countrywide share to be converted to 0.1822 of a share in Bank of America. The takeover is not expected to impact Bank of America's earnings per share this year, but likely will bolster EPS next year. By 2011, Bank of America expects to fully realize $670 million in after-tax cost savings tied to the Countrywide deal.

The Washington Post reported that their sources suggested a deal could emerge "very soon" but added that there is a possibility it could be delayed or even fall through. Rumors began when Bank of America made a $2 billion equity investment in Countrywide in August 2007. Friedman, Billings, Ramsey Group analyst Paul Miller believes the bank could pick up the Calabasas, Calif.-based company at a bargain. He feels the mortgage lender may be close to bankruptcy. Investors were pleased which pushed up shares in Countrywide 52 percent, or $2.64, to a closing price of $7.76 in trading.

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