Fascinating.  It just gets jucier and jucier.  I thought BofA was insane being associated with CFC in the first place.  Of course, this is over my pay grade.

Alan, Well, that just shot my Countywide stock straight to the crapper...it's been heading that way for sometime, but I feel the flush coming now. Darnit!!! lol...Thanks for making my night, HA!!! Great post.

I don't think I would touch countrywide with a ten foot pole.

AJ,  I have been following this situation myself.  Looks like the deal may not happen.  I now of a lot of originators avoiding Countrywide right now.  I don't see any changes to that in the near future.

I would touch any lender that has option arm loans  Country wide, World Savings or Washington Mutual.  they will all have large losses

I would not touch any lender that has option arm loans  Country wide, World Savings or Washington Mutual.  they will all have large losses

boy - this is very interesting.  We will have to keep watching to see what transpires.  The "word" is that things with Countrywide were worse then what was first thought... time will tell.

CFC has long been playing games with the books as they treated all of the additional principal on those California neg-am option-ARM loans as income. Now that they are going bad in droves, Countrywide has to adjust to the present (and falling) value of the assets collateralizing those loans.

One should expect that the massive losses at Countrywide to continue, and the final deal with BofA, if consummated, to be very different than the one originally proposed.

AJ, More, more.....what do you think will happen? You are at the source of it all and leave me wishing you had said more.

Alan: This is VERY interesting. Please keep us posted on this one. I would like to see how it all plays out

Those are big numbers. The financial types are always looking for creative ways to make money. Buy a company and then file for bankruptcy? Only on Wall Street would that work on that large a scale.

This was very interesting.  We'll be watching for future developments in this story.  Thanks for this post.

This is very interesting. Will be intersting to see how it all transpires.

This is all very surprising! It all is getting worse as the days go by...........

 Hi AJ, it's almost like watching a real world soap opera unfold but with a really bad ending.

 Off topic, I love your blog header... very clean, very classy, great job!

Lenn, Frank, Bob, Lola, Wayne Roland, Janet, Stephen, Russ, Jimmy, John Elizibeth to all. 
I do not think the situation is getting worse. I believe it is going as planned from the beginning.  First, I personally think that the Feds "suggested" that BofA buy CW.  I also believe that the plan all along was to put all of the bad debt ($40B to $60B or more), all unwanted assets, etc into a subsidiary where the plan was to file for bankruptcy. At the same time, I believe the plan was to merge the "good" assets into BofA.  Keep the good get rid of the bad and with the Feds blessing.  If my personal views are anywhere correct, then the Feds will not really fight the bankruptcy. 

I do want to stress that this is all personal conjecture.  I base this conjecture on my distrust of how our government runs and facts I have I read in various posts, news mags and papers.  And yes, it will be interesting on how it all plays out.

Sorry to bust bubbles but Bank of America has a strict collection policy in place, trust me !  I have seen first hand how the bank will literally go into your checking account and take the money out!   I worked in the bank for a short period after relocating my old job from MBNA when they closed the MBNA legacy site down with the new bank of america taking charge... during the changes MBNA embraced a lot of rejection from Bank of Americas new policies for cardholders and customers on the phone were not so delighted.  One call i handled included a man who was close to bankruptcy and had $10,000 in the account, he claims Bank of America took it out of his account, now since I was dealing with investigations in the collections dept, I determined it was true and explained to him he did not pay his card on time and was part of his card holder agreement.  If you don't pay your acct. on time trust me a manager will sign off to make sure the money is taken out of your acct. for you to pay it off!  Anyway I was just getting started in real estate 2 years ago so I had better things to worry about with my time.  I have since moved on from my old favorite MBNA job loss and Bank of America acquiring it.  I was ranked # 3 in sales when MBNA closed on March 10th 2006.  I transferred over $7 million for them the last year they were in business plus trained new hires.  Now with Bank of America gobbling up Countrywide, their is not as many Banking options left for consumers to be honest which it will be very interesting to see what B of A will be doing this year.  Will costs be going up?  Keep watching to find out...

Marti, I think Soap Operas can be compared to family telivision.  This merger...... AJ

Tom, I totally agree with you.  AJ

Ahh. The Bank of America/Countrywide saga continues. I think it should be very interesting to see how this all pans out when it's said and done.

great comment Tom Davis. I was an MBNA customer for years and thought it strange when they were taken over by BofA. I still hold a credit card with them, but prefer other cards. This merger is going to be very interesting. In light of JP Morgan's recent bailout of Bear Stearns, we will see much consolidation in the months to come. 

Lisa, I think the merger is just a way to get bad debt off the books.  One always hopes for a "White Knight" but I do not think we will see one in this sub prime crisis.  I am waiting to hear some news about write-offs from several other of the large banks in the near future. 

Eugene:  I think large banks are not necessarily the way to go.  Have you notice the qualify of service in all the large banks lately.  Warren Buffet said May 3rd that he believes that "THE big banks have become too large to manage their own risks properly". 

Here's a great link to a Wall Street Analyst that says Countrywide is only worth $1 per share, and that's all Bank of America should offer in their buyout/merger.

http://www.brokeroutpost.com/loans/extclickverify.asp?url=http://biz.yahoo.com/ap/080506/bank_of_america_analyst_note.html?.v=1

donmt think so. i heard from a countrywide broker last week that they are no longer doing stated....in keeping with bofa's current guidelines all stated programs will end in july. things appear to be moving forward slowly.

Ron, the buzz on the street is getting stronger concerning creating a subsidiary / bankruptcy filing for CW's bad debt. AJ

Can't wait to see how it all unfolds... it sounds like a match made in-- well you fill in the blank. No matter how one sees the glass (half full or empty)--It's sure to be a shake up... Thanks AJ for the post.

Keishia, there definitely will be a shake up.  The only winner might be the merge bank.  I wonder about all the families who have yet to have their mortgages reset.

Seriously...  I didn't see how this was ever going to work out.  Wake up BOA, run...

Debbie, I do not know if I am right or wrong in how this will work out but this scenario, BofA puts all the bad in a subsidiary company and then files BK (i.e., all the bad debt is not on BofA's books and they and wash their hands of it) and then merge all the good Assets seems like a very big win for BofA.  At the time BofA made their bid for CW, the  Feds seem to be looking for a way to get CW out of trouble.  That is why I suspect that there was pressure from the Feds for BofA to buy CW.  What would BofA get in return?  My conclusion is that the Feds promised to back this plan and not contest the BK.

This is headline news here in the Charlotte area, home of B of A.  Will be interesting to watch what happens!

AJ, this is an interesting post. It will be something I'll continue to watch - and see if it really does happen. ;-)