WHAT ARE THEY THINKING

Well the news seems to reflect that indeed Bank of America is going to attempt to buy Countrywide Mortgage. The only thing that comes to my mind is what in the world is B of A thinking? Countrywide is the nation’s largest mortgage lender with the nation’s largest mortgage company problems which have all not surfaced as yet. The extent of Countrywide’s problems is far from over or even yet to be determined. Their portfolio of loans going bad is gaining speed and does not seem to have an end in site. B of A has the same type problems with their mortgage portfolio and they are by no means out of the woods yet either. As I recall B of A already loaned Countrywide some 2 billion dollars. I wonder where that money went. Seems to me the loan was going to fix the problems at Countrywide when it was made. Could the reason of the purchase be that B of A is already in too deeply?

The industry seems to think it is a good thing for the sale to happen. Countrywide simply going out of business could shake up the mortgage world way too much at the present time according to the experts. I was one that said Countrywide was way too big to ever go out of business when all this mess started. If they can go broke is anyone safe? I don’t think so. The mortgage mess this country is facing seems to have a mind of its own with a quick end no where in site. Bankruptcy for Countrywide according to the same experts does not seem to be the best alternative either for some reason. That seems to be a bit safer to me (I am no expert here for sure) as that at least keeps Countrywide’s problems in their court to be solved. Bank of America is the largest bank in the country but I fear they are not big enough to take on Countrywide’s problems and tackle their own as they continue to surface. The country sure doesn't need B of A in deep trouble now as well. I am not even close to sure the regulators will allow it either. If they do there is probably more to the story than we know.

All in all I hope if the deal goes through it somehow works but I for one have plenty of doubts. I just don’t get why B of A would take on that much liability that they still can’t define. There is still plenty to surface about both these lenders and their mortgage companies. If I were B of A I might just opt to take a seat and be a looker rather than a buyer.

Finally I still see the fellow on the TV all the time telling me about the no cost refi for us homeowners. Countrywide might save some money by taking those adds off the TV. I am not sure anyone is buying that pitch anymore.

More to come

Lonny