So what's the latest on the Bank of America buyout of debt-addled Countrywide? Well, it seems that signs are pointing to an 'oops, we made a mistake... no deal' coming out of BofA in the next few days. Bank of America was never particularly strong in the mortgage lending arena, and this purchase would have automatically catapulted them to the top of the heap. The problem is, is it worth all the trouble that CW brings? Countrywide was HUGE in pay-option ARMS and other risky mortgages that people are all too willing these days to walk away from. I know from first-hand experience that people were misled on these programs. Any other loan officers out there remember the pitch- 'the pay option ARM is great- it's based on a twelve month AVERAGE of the MTA, so your clients can be assured that it won't move greatly in the future'. FAST FORWARD to reality, and those ARM payments were going up every single month, and by a lot. Great product guys, I would expect a class-action lawsuit any day now. And that's just one example of how they did things there- risky, risky risky... all they cared about was the bottom line, and how wealthy they could make their executives. I think Bank of America woke up and realized they don't need CW. In fact, because of BofA's very competitive purchase programs, they could get a significant increase in market share just by good, old-fashioned product innovation. 

They are taking risks, but nowhere NEAR as dangerous as CW. 

What's the feeling on the street? Is this marriage ending? Will BofA pull out?