Putting an end to all of the rumors that has been flying around Wall Street, Bank of America Corp. announced today that it's purchasing Countrywide Financial Corp. for $4 billion, effectively doubling down on a previous investment in the troubled firm and catapulting the buyer into the top spot among mortgage lenders and loan services in the U.S.
The stock-swap deal will put an end to the independence of the troubled California lender headed by Angelo Mozilo, and represents an increase from the Charlotte, N.C., bank's August investment of about $2 billion. "We believe this is the right decision for our shareholders, customers and employees," said Mozilo, chairman and chief executive of Calabasas, Calif.-based Countrywide.
I think, this is positive news to the mortgage industry as it may add stability and confidence back into the highly volatile mortgage market and may help to re-establish the all but non-existent secondary market. Only time will tell, but broker's for Bank of America and Countrywide welcome the combination of Bank of America's strength and product lines with Countrywide's network and local presence.
This will add stability back into the mortgage market combined with the abnormally low rates we are experiencing such as 5.75 Fixed for 30 years, may give a boost back into the slow real estate market.
I feel this is not only important for the real estate market but perhaps just as important to the overall economy which is reportedly on the verge of recession.
What are your feelings on todays news?
Expect Success,
Wallace Hobbs
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