| Author |
Previous Topic | Next Topic |
|
EMScommercial
5138 Posts |
 Posted - 01/10/2008 : 1:14:47 PM
|
I just wanted to be the 'on the scene reporter' here with this article....
****************************************
http://online.wsj.com/article/SB119999250189581559.html?mod=myyahoo_module
Bofa in Talks to Buy Countrywide
By DAMIAN PALETTA, VALERIE BAUERLEIN and JAMES R. HAGERTY
January 10, 2008 3:48 p.m.
Bank of America Corp. is in advanced talks to acquire struggling Countrywide Financial Corp., according to people familiar with the situation.
It isn't clear how quickly a deal might be struck, but two people familiar with the matter said it could occur very soon. It also is possible that an agreement could be delayed or fall apart altogether.
The market value of Countrywide has plunged to about $3 billion, which represents about two months' profit for Bank of America. The Charlotte, N.C., bank paid $21 billion cash over the summer for LaSalle Bank of Chicago.
Countrywide's stock has plunged in recent days amid intensifying anxiety among investors over a continuing surge in defaults and foreclosures afflicting the Calabasas, Calif., lender and others in the mortgage industry as home prices fall and the threat of a recession grows.
Bank of America last August propped up Countrywide by buying $2 billion of preferred shares convertible into a stake of about 16% in the lender.
Since then, Countrywide's default problems have continued to grow, sparking speculation that the company could face bankruptcy. Countrywide was forced to deny earlier this week that it planned to file for bankruptcy.
Since buying a stake in Countrywide, Bank of America has been seen as a potential buyer of the troubled lender. The Charlotte, N.C., company has first right of refusal in any sale of Countrywide, and Bank of America has a long history of opportunistic takeovers of banks facing distress.
Bank of America declined to comment, citing a longstanding policy on not commenting on rumors and speculation. Countrywide representatives didn't immediately respond to a request for comment.
When the Federal Reserve approved Bank of America's acquisition of LaSalle in September, the combined bank grew to hold 9.88% of the country's deposits. Federal law prohibits a bank holding company from controlling more than 10% of U.S. deposits after acquiring another bank.
But the law includes a caveat: The 10% limit doesn't apply to federally chartered thrifts, meaning a bank-holding company may control more than 10% of deposits in the U.S. following a thrift acquisition. Since a Countrywide subsidiary called Countrywide Bank is a federally insured thrift, that may give Bank of America room to maneuver around the deposit cap.
It isn't known if Bank of America is trying to structure the deal in a way that would help shield the bank from some of the biggest financial uncertainties facing Countrywide.
Write to Damian Paletta at damian.paletta@dowjones.com, Valerie Bauerlein at valerie.bauerlein@wsj.com and James R. Hagerty at bob.hagerty@wsj.com
***********************************
gotta pimp myself - as my wife calls it! if you need help with your commercial scenarios....
Please let us know if we can help you - I'm sure that if there is any financing options for your clients out there, we can find it in our vast internal database of commercial lending sources of which we broker for (currently stands at 250+ entries as of today).
Check out our BASIC RATE/TERM sheet to get an idea if your scenario is 'in the ball park' and then contact us to start the ball rolling to get specific numbers for your loan! http://www.eclipsemortgageservices.com/aaaaaEMS_ratesheet.pdf
Thanks!
|
|
visionmtg
534 Posts |
Posted - 01/10/2008 : 1:15:45 PM
|
| So it looks like it's pretty much a done deal hunh?? |
|
|
krsmith1
9 Posts |
Posted - 01/10/2008 : 1:28:26 PM
|
| The question I have is if B of A purchases Countrywide, will Countrywide become like B of A who is no longer accepting wholesale originations. Any ideas out there?? |
|
|
ComLender
1266 Posts |
Posted - 01/10/2008 : 4:03:59 PM
|
| Stock is up to 7.76 from 5.08 yesterday. |
|
|
RDwyer
3277 Posts |
Posted - 01/10/2008 : 4:09:17 PM
|
Imagine all of those CW retail offices sporting a new BofA logo! I think BofA sees this more of a retail / servicing / cross-selling acquisition than a wholesale acquistion.
Of course, what do I know? Some speculate that BofA's exit from wholesale was simply a precursor to having Countrywide as its wholesale division. |
|
|
MisterVA
6549 Posts |
Posted - 01/10/2008 : 4:09:46 PM
|
| Guess we know who was buying up the stock. |
|
|
EMScommercial
5138 Posts |
Posted - 01/10/2008 : 4:47:13 PM
|
| i think ur right robert.... |
|
|
peter
4521 Posts |
Posted - 01/10/2008 : 5:02:53 PM
|
Why would B of A want to take over Countrywide with all the REOs and
the explosive Option Arm loans on the books? It would be like buying a
warehouse full of explosives. The house name and image of B of A could
not be further enhanced by owning Countrywide or making an investment into
the already risky credit market. There are other higher-return areas of
investment outside the mortgage industry that are less risky and promise
safer habor of B of A invetments.
What else do you see left of Countrywide that are worth buying by B of A?
Peter
|
|
|
Mandyvilla
3383 Posts |
Posted - 01/10/2008 : 5:32:30 PM
|
| I can neither deny nor confirm anything other than the fact if Mozillo comes out of this w/ $36M, there is something wrong with this world. |
|
|
Premierfox
25 Posts |
Posted - 01/10/2008 : 5:43:26 PM
|
quote:
Originally posted by peter
Why would B of A want to take over Countrywide with all the REOs and
the explosive Option Arm loans on the books? It would be like buying a
warehouse full of explosives. The house name and image of B of A could
not be further enhanced by owning Countrywide or making an investment into
the already risky credit market. There are other higher-return areas of
investment outside the mortgage industry that are less risky and promise
safer habor of B of A invetments.
What else do you see left of Countrywide that are worth buying by B of A?
Peter
I disagree peter.
Although there are some bad loans, 9 million new customers to the B of A family will surely be welcomed.
Besides, the price is so far below book that even if you had to write down a ridiculous number, you would still make big money.
This has been planned since before the first loan. Believe it. |
|
|
peter
4521 Posts |
Posted - 01/10/2008 : 6:22:14 PM
|
Gen, your point is well taken. I didn't even think about that. Thanks.
Peter |
|
|
KHufford
5888 Posts |
Posted - 01/10/2008 : 6:32:13 PM
|
I posted this at lunch time Chris, but Ill give you credit for the BREAKING news  |
|
|
MisterVA
6549 Posts |
Posted - 01/10/2008 : 6:34:26 PM
|
| In other breaking news, Sir Edmund Hilary, for whom Hillary Clinton was named several years after her birth, died today. |
|
|
dstout
920 Posts |
Posted - 01/10/2008 : 6:34:51 PM
|
quote:
Originally posted by KHufford
I posted this at lunch time Chris, but Ill give you credit for the BREAKING news
No, you posted that it was "announced" Countrywide had already been bought out, which is untrue. |
|
|
peter
4521 Posts |
Posted - 01/10/2008 : 6:41:45 PM
|
With 9 million of CW customers, B of A's banking infrastructure wouldn't be
able to cope and if they acquired CW they would have to allow wholesale to
run its course at least in the first phase of integration which might even
take a few years. But the benefit of cross-selling their financial and
mortgage products into CW network of customers will be there to reap additional
revenue for B of A. But this would require B of A's board to approve it, and
of course subject to banking regulations and anti-trust implications for the
mortgage industry if anyone could contest.
Peter |
|
|
KHufford
5888 Posts |
Posted - 01/10/2008 : 6:43:26 PM
|
quote:
Originally posted by dstout
quote:
Originally posted by KHufford
I posted this at lunch time Chris, but Ill give you credit for the BREAKING news
No, you posted that it was "announced" Countrywide had already been bought out, which is untrue.
The second the "invested" 2 billion they bought CW... |
|
|
dstout
920 Posts |
Posted - 01/10/2008 : 6:44:17 PM
|
quote:
Originally posted by KHufford
quote:
Originally posted by dstout
quote:
Originally posted by KHufford
I posted this at lunch time Chris, but Ill give you credit for the BREAKING news
No, you posted that it was "announced" Countrywide had already been bought out, which is untrue.
The second the "invested" 2 billion they bought CW...
Not exactly. And the only thing that has been announced is that CW is in talks with B of A. The deal could fall apart. But posting threads with false information just to be the first one to break the news is obnoxious and annoying. |
|
|
KHufford
5888 Posts |
Posted - 01/10/2008 : 6:50:18 PM
|
| I see you are in PHX Dustin...what company do you REP? ....CW by any chance!? |
|
|
dstout
920 Posts |
Posted - 01/10/2008 : 6:53:02 PM
|
quote:
Originally posted by KHufford
I see you are in PHX Dustin...what company do you REP? ....CW by any chance!?
Nope. I'm not in the mortgage business (thank God). |
|
|
propertylender.c
1269 Posts |
Posted - 01/10/2008 : 6:59:21 PM
|
quote:
Originally posted by Premierfox
quote:
Originally posted by peter
Why would B of A want to take over Countrywide with all the REOs and
the explosive Option Arm loans on the books? It would be like buying a
warehouse full of explosives. The house name and image of B of A could
not be further enhanced by owning Countrywide or making an investment into
the already risky credit market. There are other higher-return areas of
investment outside the mortgage industry that are less risky and promise
safer habor of B of A invetments.
What else do you see left of Countrywide that are worth buying by B of A?
Peter
I disagree peter.
Although there are some bad loans, 9 million new customers to the B of A family will surely be welcomed.
Besides, the price is so far below book that even if you had to write down a ridiculous number, you would still make big money.
This has been planned since before the first loan. Believe it.
I think Peter is correct.
There were the worlds' dumbest loans made on real estate in my area (Glendale, CA) that I had to check out who was financing.
The majority was Countrywide and they a taking major hits on them.
The joke was:
Did you see what Chrysler did to Mercedes?
Now, it will be:
Did you see what Countrywide do to Bank of America? |
|
|
KHufford
5888 Posts |
Posted - 01/10/2008 : 7:00:05 PM
|
quote:
Originally posted by dstout
quote:
Originally posted by KHufford
I see you are in PHX Dustin...what company do you REP? ....CW by any chance!?
Nope. I'm not in the mortgage business (thank God).
From his BIO
" Left the mortgage business for the internet advertising business! Probably the best move I've ever made."
Get the Hell out of here then loser! |
|
|
dstout
920 Posts |
Posted - 01/10/2008 : 7:04:00 PM
|
quote:
Get the Hell out of here then loser!
I'm not the one posting false information :). |
|
|
KHufford
5888 Posts |
Posted - 01/10/2008 : 7:06:47 PM
|
Dustin,
You ARE posting false info. Your title says wholesale rep...you admitted your not in the Biz!!!
That is scamming and a violation of forum rules. |
|
|
dstout
920 Posts |
Posted - 01/10/2008 : 7:08:30 PM
|
quote:
Originally posted by KHufford
Dustin,
You ARE posting false info. Your title says wholesale rep...you admitted your not in the Biz!!!
That is scamming and a violation of forum rules.
I think you mean "you're".
I created this ID when I was a wholesale rep. There are no options on the BO for changing your status. So I put it in my bio rather than create another ID (which is breaking the rules of the forum).
Don't be upset because someone pointed out your attention-seeking thread containing false information. |
|
|
Premierfox
25 Posts |
Posted - 01/10/2008 : 7:08:55 PM
|
I was thinking antitrust as well when I first heard the rumors but after thinking about it, I realized that the Government can't ask for a better outcome. B of A monopolizing the mortgage business is a far better scenario than the fallout of a Countrywide chapter 13.
As far as the board goes, this was a forgone conclusion when they lent the first 2 billion.
I would imagine that integration would take some time but not more than 2 years.
Short term i think this will help everyone. i think that it definitely will breathe some much needed confidence back into financials as this can kind of be viewed as a slight rise from the bottom. long term, Im not so sure that this is good for the business.
quote:
Originally posted by peter
With 9 million of CW customers, B of A's banking infrastructure wouldn't be
able to cope and if they acquired CW they would have to allow wholesale to
run its course at least in the first phase of integration which might even
take a few years. But the benefit of cross-selling their financial and
mortgage products into CW network of customers will be there to reap additional
revenue for B of A. But this would require B of A's board to approve it, and
of course subject to banking regulations and anti-trust implications for the
mortgage industry if anyone could contest.
Peter
|
|
|
KHufford
5888 Posts |
Posted - 01/10/2008 : 7:15:58 PM
|
quote:
Originally posted by dstout
quote:
Originally posted by KHufford
Dustin,
You ARE posting false info. Your title says wholesale rep...you admitted your not in the Biz!!!
That is scamming and a violation of forum rules.
I think you mean "you're".
I created this ID when I was a wholesale rep. There are no options on the BO for changing your status. So I put it in my bio rather than create another ID (which is breaking the rules of the forum).
Don't be upset because someone pointed out your attention-seeking thread containing false information.
Right, so when you are no longer in the biz, you LEAVE this forum...you don't continue posing as an AE just to hang out and cause trouble.
And don't point out grammatical issues to sidetrack your lies please... |
|
|
dstout
920 Posts |
Posted - 01/10/2008 : 7:20:52 PM
|
quote:
Right, so when you are no longer in the biz, you LEAVE this forum...you don't continue posing as an AE just to hang out and cause trouble.
There are no rules against continuing to post just because one decides to leave the field. I've always enjoyed this forum. And I certainly do not "pose" as an AE. That would be replying to scenarios. But I appreciate your concern. |
|
|
ChangingTymes
125 Posts |
Posted - 01/10/2008 : 7:24:33 PM
|
I'm wondering if perhaps BA only wants the servicing portfolio? Is there a way that CW could sell the portfolio, then disolve the rest of the co? or break it in to parts?
There are too many overlapping locations of BA and CW, at least here on the East Coast.
So, at the very least, the retail side would lose a ton of folks, mid management as well, and upper management, and welllll...... lots of unemployment.
|
|
|
MisterVA
6549 Posts |
Posted - 01/10/2008 : 7:30:30 PM
|
| The producers will have jobs. |
|
|
akaagassi
138 Posts |
Posted - 01/11/2008 : 08:27:29 AM
|
Goodbye subprime and goodbye Option Arms...or at least high LTV option ARMs or even stated ones...they'll never come back like they used to be now CW is under the BofA umbrella...
I could see the CW name existing on the wholesale side of the business...BofA already knows what wholesale lending can do for it's portfolio and cross sale opportunities...just now it'd be at an enhanced level...
4 major lenders down to 2...crazy...WaMu will get acquired by Chase...there's no doubt that will go through after this...
In the long run, BofA could be getting a portfolio at a steep discount, and once the secondary market recovers, they'll be in a good position to make some significant profits there... |
|
|
| |
Previous Topic | Next Topic |
|
Search for: 
