From the "They Are Either Braver Or Dumber Than I Am Department":
CHARLOTTE, N.C. - Bank of America Corp. said Friday it has agreed to buy Countrywide Financial for $4 billion, a deal that rescues the country’s largest mortgage lender.
It comes just months after Bank of America plugged $2 billion in Countrywide Financial Corp. during the height of the summer’s global credit crunch, and just weeks after Bank of America Chief Executive Ken Lewis vowed that making a deal in the mortgage industry would require him "to eat about seven years of my words."
It also places Lewis, an aggressive dealmaker, in the position of a market savior. By buying Countrywide, he’s keeping the industry and regulators from the messy task of figuring out who would take on the responsibility of collecting payments for the millions of U.S. home loans serviced by the Calabasas, Calif.-based lender.
"There’s still plenty of risk involved," said Bart Narter, senior analyst at Celent, a Boston-based financial research and consulting firm. "He’s brave to do it. But I think that it’s very likely down the road to be profitable, maybe not immediately, but long-term."
