Countrywide Bank, Good buy Now?

[INRI]

3 months ago this stock was at $20.10/share, as of Jan 8 2008 it's at $5.47/share. Anyone think now is a good time to buy this stock, or just let Countrywide continually sink?? I personally think the stock will go even lower or a bankruptcy will happen. Or than again, maybe they'll get another infusion of billions of dollars. :puke:

Even with their "infusion" of many billions upon billions of dollars, it's amazing to see their stock is still tanking.


LOS ANGELES (AP) — Shares of Countrywide Financial Corp., the nation's largest mortgage lender, plunged Tuesday after the company denied rumors that it was planning to file for bankruptcy protection.

The stock fell $2.17, or 28.4 percent, to $5.47 on Tuesday after sinking to a 52-week low of $5.05.

http://moneycentral.msn.com/investor/charts/chartdl.aspx?D5=0&CP=0&PT=4&CE=0&D4=1&ViewType=0&D3=0&PeriodType=3&Symbol=CFC&&ShowChtBt=Refresh+Chart&DateRangeForm=1&C9=0&DisplayForm=1&ComparisonsForm=1

[DinarInMikeswrld1]

The housing market is going to be bad for at least another year.
It wouldn't surprise me one bit to find that CFC's bankruptcy rumors are true.
I personally wouldn't touch home builders, mortgage companies, and such this year.
The silver lining is that if you are a buyer, home prices should continue to fall through 2008.

[removed account per user]

Most hated stock of the last 12 months... it will be the first thing to recover when the mortgage business turns around. BofA tried to call a bottom at $18. But a bottom does exist. And it could recover to $15 - $18 in 2 years from here.

[RotaryRevn]

I wouldn't touch it at any price. There toast. If your do go there already, you should find http://www.thehousingbubbleblog.com interesting.

[Skyhawk]

3 months ago this stock was at $20.10/share, as of Jan 8 2008 it's at $5.47/share. Anyone think now is a good time to buy this stock, or just let Countrywide continually sink?? I personally think the stock will go even lower or a bankruptcy will happen. Or than again, maybe they'll get another infusion of billions of dollars. :puke:

Even with their "infusion" of many billions upon billions of dollars, it's amazing to see their stock is still tanking.


LOS ANGELES (AP) — Shares of Countrywide Financial Corp., the nation's largest mortgage lender, plunged Tuesday after the company denied rumors that it was planning to file for bankruptcy protection.

The stock fell $2.17, or 28.4 percent, to $5.47 on Tuesday after sinking to a 52-week low of $5.05.

http://moneycentral.msn.com/investor/charts/chartdl.aspx?D5=0&CP=0&PT=4&CE=0&D4=1&ViewType=0&D3=0&PeriodType=3&Symbol=CFC&&ShowChtBt=Refresh+Chart&DateRangeForm=1&C9=0&DisplayForm=1&ComparisonsForm=1


Being a professional real estate appraiser I would recommend staying out of Countrywide after the reset of the 5 year arms occurs sometime in the mid part of this year. What we have right now is the effect of 3 year arms being reset, the next Tsumani is about to occur and that is the 5 year arms
resetting. The housing market will be very soft, with most markets reporting 1-2 year supply of housing inventory.
From a practical standpoint Countrywide is a larger secondary lender than FNMA or FHLMC, and I do not believe the Fed would like to see Countrywide go down, but becoming a $1 or less stock for a while could be a possibility.
Skyhawk

[yunowu]

Being a professional real estate appraiser I would recommend staying out of Countrywide after the reset of the 5 year arms occurs sometime in the mid part of this year. What we have right now is the effect of 3 year arms being reset, the next Tsumani is about to occur and that is the 5 year arms
resetting. The housing market will be very soft, with most markets reporting 1-2 year supply of housing inventory.
From a practical standpoint Countrywide is a larger secondary lender than FNMA or FHLMC, and I do not believe the Fed would like to see Countrywide go down, but becoming a $1 or less stock for a while could be a possibility.
Skyhawk

I obtained my Realtor license three years ago, but I rarely use it. Too busy to be a dentist I guess. Last night during a CE course the very same question popped up. The instructor gave almost the identical answer to the given question !!
Cool !! :rock: :rock: :rock:

[INRI]

as of right now Countrywide (CFC) is down to $4.63/share from opening at $5.80/share.

Wowers, this stock is swimming like a 300 ton granite rock!

[dukedunde]

3 months ago this stock was at $20.10/share, as of Jan 8 2008 it's at $5.47/share. Anyone think now is a good time to buy this stock, or just let Countrywide continually sink?? I personally think the stock will go even lower or a bankruptcy will happen. Or than again, maybe they'll get another infusion of billions of dollars. :puke:

Even with their "infusion" of many billions upon billions of dollars, it's amazing to see their stock is still tanking.


LOS ANGELES (AP) — Shares of Countrywide Financial Corp., the nation's largest mortgage lender, plunged Tuesday after the company denied rumors that it was planning to file for bankruptcy protection.

The stock fell $2.17, or 28.4 percent, to $5.47 on Tuesday after sinking to a 52-week low of $5.05.

http://moneycentral.msn.com/investor/charts/chartdl.aspx?D5=0&CP=0&PT=4&CE=0&D4=1&ViewType=0&D3=0&PeriodType=3&Symbol=CFC&&ShowChtBt=Refresh+Chart&DateRangeForm=1&C9=0&DisplayForm=1&ComparisonsForm=1
Countrywide is the sub prime company to Wells Fargo, I don't think they will let them fall completly.

[geowhiz]

as of right now Countrywide (CFC) is down to $4.63/share from opening at $5.80/share.

Wowers, this stock is swimming like a 300 ton granite rock!


Wow, might be a great stock to short on a rebound. Any chance, and at what price would you pick some up at? Any idea?

[PraiseKingGeorge]

Countrywide is the sub prime company to Wells Fargo, I don't think they will let them fall completly.

While Countrywide may handle the sub-prime business for Well Fargo, they are THE largest home loan lender in the United States (for all types of loans).

This stock was over $45.00 not too long ago. I would stay away from it, for the reasons stated in the above posts, for at least 6-8 months and maybe longer.

They purchased my mortgage loan from my lender last year, and are constantly contacting me to upgrade my loan program.

[removed account per user]

The company is worth just 3 billion dollars at the current $5/ share.

But they have a price / book value ratio of .2 (meaning, if you closed down the company and sold everything, you could expect to receive 15 billion dollars, or about $25 / share).

They also have 35 billion in cash. Or $65 cash per share.

25% of the stock is sold short. All those people will have to cover at various points, whether on a Fed rate cut or a dividend payment. Its just a waiting game.

I just logged on to E*TRADE and bought 1000 shares @ $4.73. My plan is to just hold for a few weeks until a rate cut, which should bump the stock by a dollar. This is not serious investing, and is not advisable, just a bit of fun speculation. We will see..........

[INRI]

Wow, might be a great stock to short on a rebound. Any chance, and at what price would you pick some up at? Any idea?

I will be in when it hits $4.00 or lower.

Warkaholic just lost .20/share as of today. I personally think the stock will go lower. How much, I don't know, but I do agree with Warkaholic that the stock will rise on a fed cut.

This stock will be a fun short stock for me. Make a little money on Countrywide's back!:giggle:

[INRI]

With Countrywide losing roughly $1.00/share/day. I'll lock in 500-1000 shares as early as tomarro! :giggle: :giggle:

[geowhiz]

With Countrywide losing roughly $1.00/share/day. I'll lock in 500-1000 shares as early as tomarro! :giggle: :giggle:


Right behind you! :cash:

[removed account per user]

I will be in when it hits $4.00 or lower.

Warkaholic just lost .20/share as of today. I personally think the stock will go lower. How much, I don't know, but I do agree with Warkaholic that the stock will rise on a fed cut.

This stock will be a fun short stock for me. Make a little money on Countrywide's back!:giggle:

I haven't lost a dime until I sell. Countrywide is a volatile stock, it gaps up and down by 10% - 20% per day. It is not for the faint of heart.

You want to short countrywide at $4 share? Be my guest. But that seems insane to me... all of the pros have already shorted it far below its shut-down-the-business value. All of the easy money has been made shorting it.

But lets keep this thread alive and see who is right. The shorts, or the longs.

[geowhiz]

Probably not worth shorting into my margin account. Just play it for a few months, maybe a year and see what happens to interest rates and housing, economy, etc.. Certainly seems cheap (was 45 bucks last year)

[INRI]

I haven't lost a dime until I sell. Countrywide is a volatile stock, it gaps up and down by 10% - 20% per day. It is not for the faint of heart.

You want to short countrywide at $4 share? Be my guest. But that seems insane to me... all of the pros have already shorted it far below its shut-down-the-business value. All of the easy money has been made shorting it.

But lets keep this thread alive and see who is right. The shorts, or the longs.

Hey, keep your pants on Warkaholic.

Who's right or wrong? Wow, childish games eh? I'm not here for who is right or wrong, maybe you are, but I want to make some money on this deal. Do what you want and I will do what I want, but playing "let's see who's right" games if childish.

There is always more than 1 way to make money. Keep that in mind.

[removed account per user]

Hey, keep your pants on Warkaholic.

Who's right or wrong? Wow, childish games eh? I'm not here for who is right or wrong, maybe you are, but I want to make some money on this deal. Do what you want and I will do what I want, but playing "let's see who's right" games if childish.

There is always more than 1 way to make money. Keep that in mind.

Nah man, you got it all wrong... Its just a game... to see who's prediction of the future is more accurate.

We are all here because we are risk takers and look for unconventional ways to make money. In that spirit, sometimes we go head-to-head in a bet.

In a debate, you take a side, defend your position, etc. Then the spectators watching can see how it plays out. Its harmless fun.

[INRI]

Nah man, you got it all wrong... Its just a game... to see who's prediction of the future is more accurate.

We are all here because we are risk takers and look for unconventional ways to make money. In that spirit, sometimes we go head-to-head in a bet.

In a debate, you take a side, defend your position, etc. Then the spectators watching can see how it plays out. Its harmless fun.

You the man!

Found this right now. http://money.cnn.com/2008/01/09/news/companies/bofa_countrywide.fortune/index.htm?cnn=yes

Thought is was.... hmmmmmm.... informative to say the least.

Bank of America's Countrywide trap
The financial behemoth's $2 billion investment in the mortgage lender is disappearing fast. Too bad its options are limited.

NEW YORK (Fortune) -- Late last summer, Bank of America and its deal-hungry chief Kenneth Lewis won kudos for a $2 billion investment in Countrywide Financial, the once high-flying mortgage lender hit hard by the housing slump.

In one stroke, Lewis erased his reputation as a serial over-payer with the kind of convertible preferred stock deal that arbitrage traders dream of. In exchange for its $2 billion, Bank of America secured the right to buy Countrywide (CFC, Fortune 500) stock at $18, a tidy 21 percent discount over the price at the time. Lewis, it seemed, had deftly locked in an instant $424 million profit for the bank.

Nobody's congratulating Bank of America these days. As Countrywide shares tank and speculation mounts that the company will be forced into bankruptcy, the bank's stake has plunged in value, to about $560 million. Now Bank of America faces a tough choice: It can buy Countrywide outright, pour even more money into the lender, or simply bide its time and hope for the best.
Whatever it does, Bank of America no longer appears so savvy. And Lewis, who's been criticized for paying top dollar for, among other companies, credit-card lender MBNA ($35 billion) and U.S. Trust ($3.3 billion), is once again looking like a spendthrift.

Bank of America and Countrywide declined comment.

Their deal looked so simple when it was announced in August. In return for its cash, Bank of America (BAC, Fortune 500) got a 7.25 percent yield on convertible preferred stock and the right to buy 111 million Countrywide shares, equal to a 16 percent stake. The bank also got the right of first refusal on any future Countrywide deals and stood in front of the creditors' line should the lender go bankrupt.

Lewis and Countrywide CEO Angelo Mozillo, known for his perpetual tan and wide grin, somberly proclaimed the importance of the investment in stabilizing the then-turbulent mortgage secondary markets. The markets seemed to agree.

The celebration didn't last long. The mortgage market has continued to tumble along with Countrywide's stock. Meanwhile, the company faces a barrage of federal and state investigations of its lending and accounting practices. As Countrywide's troubles have mounted, so has speculation that it would file for bankruptcy.

On Tuesday, for the second time in five months, Countrywide was forced to take the unusual move of issuing a press release denying that it was planning to seek protection from its creditors. On Wednesday, the Calabasas, Calif.-based lender released what it claimed was further proof of its stability: The amount of mortgages funded had risen above expectations, which is ordinarily good news.

Investors, however, weren't buying it, and for good reason. Buried deep in Countrywide's release were some troubling numbers: Foreclosures had doubled to 1.4 percent of unpaid principal at its key servicing unit. Late payments also skyrocketed, to 7.2 percent of unpaid balances, up from 4.6 percent. Countrywide shares have plunged 11 percent since this week's damage control began.
Now Bank of America faces a quandary: The value of its investment is falling fast, but any move - whether to buy Countrywide, invest more money, or sit tight - carries a host of potential liabilities.

If it buys Countrywide, Bank of America gets a nationally known franchise and potentially millions of clients for its suite of higher-margin consumer banking offerings, to say nothing of becoming America's most important home lender and the further economies of scale that brings.

On the downside, Bank of America would also get a lender whose credit quality is deteriorating rapidly - and who has sworn off high-margin subprime lending, essentially eliminating what was once its most attractive business. Countrywide is now banking on razor-thin margin conforming loans.

There is also the matter of Bank of America's appetite for Countrywide's portfolio. Ten percent of the lender's portfolio is invested in subprime mortgage securities, including billions worth of securitized and "raw" home equity loans (known as "HELOCS" on Wall Street) and adjustable rate mortgage securities, or ARMS, whose interest rates might prove very troubling to struggling homeowners.

This risky mix may be too much for credit-sensitive Bank of America to stomach. It could try to shed billions of dollars worth of these securities, but finding buyers would be difficult: There's zero appetite for these investments among potential buyers, who would accept nothing short of fire-sale prices. Brokers like Merrill Lynch (MER, Fortune 500), Morgan Stanley (MS, Fortune 500) and Citigroup (C, Fortune 500), meanwhile, have their own, well-documented balance sheet problems.

Option B - dumping more money into Countrywide - is unlikely too, at least in the short run. Upping its investment means believing that Countrywide's operating environment is stabilizing or even may slightly improve. To do that, however, Bank of America has to overlook Wednesday's disclosure about rising foreclosure and late payment rates. That won't be easy.

This leaves the third option, the one that Bank of America is most likely to pursue: Keeping its fingers-crossed. Still, it can't be easy for Bank of America's shareholders to watch more than billion dollars evaporate on what was clearly no more than a timing trade on the mortgage market.

They've already watched Bank of America shares fall 25 percent since October, as concerns grow over the health of the U.S. banking sector.

[INRI]

Countrywide's Home Loan Delinquencies Surge, Stock Drops


LOS ANGELES (AP) -- Countrywide Financial Corp.'s shares tumbled for the second day Wednesday after the nation's largest mortgage lender said the delinquency and foreclosure rate of home loans in its portfolio surged in December.

The news drove shares down more than 15 percent in early afternoon trading.

The company said some 6.96 percent of the loans in its servicing portfolio were delinquent last month, up from 5.02 percent in December 2006.

About 1.04 percent of the mortgage loans were pending foreclosure, up from 0.65 percent.

Meanwhile, loan fundings during December rose 1 percent from the previous month, ahead of internal forecasts.


The company said it funded $24 billion in loans during the month, giving it a total of $69 billion for the fourth quarter.

Countrywide also reported that its banking operations had assets of $113 billion at the end of December, up from $83 billion at the end of November.

Management pointed to the slight increase in loan fundings and rising bank deposits as evidence the company was heading in the right direction.

"Our fourth quarter ended with a number of positive operational trends," Countrywide's president and chief operating officer David Sambol said in a statement. "Management is pleased with the progress we have made in positioning the company to navigate the current challenging environment."

But its shares fell 83 cents, or 15.2 percent, to $4.64 on afternoon trading Wednesday after sinking as low as $4.43 earlier in the session. The drop followed a loss of $2.17, or 28.4 percent, on Tuesday.
Calabasas, Calif.-based Countrywide previously reported a $1.2 billion loss for the third quarter of last year, but management has forecast a profitable fourth quarter and 2008.


Analysts polled by Thomson Financial are estimating Countrywide will post a fourth-quarter profit of 12 cents per share on revenue of $1.9 billion.

The company is due to report its fourth-quarter financial results on Jan. 29. This is a key date!!!!!!!!!!

The company said Wednesday that mortgage applications waiting to be processed as of Dec. 31 were worth about $35 billion, down from $57.2 billion in the year-ago period.

In all, the lender originated 116,577 home loans in December, down from 212,566 in the same period of the previous year.

The company continued to shift away from risky subprime loans, with fundings totaling $6 million, down from $3.73 billion in December 2006. Subprime borrowers often have shaky credit repayment histories.

Home equity loan originations also declined last month to $1.26 billion, down 61.3 percent from $3.27 billion in the year-ago period.

Countrywide's slate of adjustable rate mortgages fell by 75 percent, to $3.68 billion from $15.22 billion a year earlier.

As of Dec. 31, the lender's mortgage loan servicing portfolio included about 9 million loans valued at $1.47 trillion, up about 14 percent from December of 2006. The company services loans originated by other lenders.

[removed account per user]

Yep.... the company is getting attacked on every front. It is absolutely hated...

But a crisis needs to be fed red meat every day to stay alive.

The shorts need to dig up new dirt on countrywide or the industry every single day to feed the subprime story.

Once they stop feeding it.... the sun shines through the clouds and everyone covers in a panic.

[RotaryRevn]

Wow, I must of been real tired when I made my previous post......lol It should of read, "if you don't go there already, check out http://www.thehousingbubbleblog.com" haha

[removed account per user]

Closed at $5.12. (I haven't locked in a profit by selling, so I haven't made money yet; it could disappear in overnight trading).

But see how volatile this thing is? Shorting it can be dangerous.

And longs don't have to worry about a margin call.... we can play the waiting game.

[removed account per user]

SOLD 1000x CFC @ $8.21


:inlove:

:rock:

:cash:

So, so, so, sorry for the shorts.... NOT

http://finance.yahoo.com/q?s=CFC

[geowhiz]

SOLD 1000x CFC @ $8.21


:inlove:

:rock:

:cash:

So, so, so, sorry for the shorts.... NOT

http://finance.yahoo.com/q?s=CFC


Figured you'd rub that one in. Didnt short, but didnt buy enough for the big score. Congrats. :clapping:

[removed account per user]

Figured you'd rub that one in. Didnt short, but didnt buy enough for the big score. Congrats. :clapping:

Thanks man. It was one of those freak things... Bank of America announced buyout talks this afternoon.

I'd like to say I did all this homework, and my methodology was what made the money.

But really, I just ran the numbers periodically over the last few months, and then had a STRONG IMPULSE when the news was so bad yesterday. Then, blind luck kicked in.

I could not reproduce these results again.

[geowhiz]

Thanks man. It was one of those freak things... Bank of America announced buyout talks this afternoon.

I'd like to say I did all this homework, and my methodology was what made the money.

But really, I just ran the numbers periodically over the last few months, and then had a STRONG IMPULSE when the news was so bad yesterday. Then, blind luck kicked in.

I could not reproduce these results again.


Nice one day hit. When I followed this thing yesterday I knew we were at the bottom of something and things were gonna turn. Followed this one all morning, then the news of the buyout came in, and I happened to be out checking on some rigs Im watching over, and missed the news. That probably cost me about 5-10000 bucks since I was planning on buying up at least 2000 shares over the course of the next few days. News is everything and you have to be married to your computer and TV anymore. UGH!!

[removed account per user]

Nice one day hit. When I followed this thing yesterday I knew we were at the bottom of something and things were gonna turn. Followed this one all morning, then the news of the buyout came in, and I happened to be out checking on some rigs Im watching over, and missed the news. That probably cost me about 5-10000 bucks since I was planning on buying up at least 2000 shares over the course of the next few days. News is everything and you have to be married to your computer and TV anymore. UGH!!

I did the same thing when ETRADE cratered from $9/share to $3.50/share last month...

Was watching it, thinking WOW, WAY TOO CHEAP, and then in a blink, it gapped up like 50% to about $5.50. Of course, a few weeks later, it was back down near $2. Not sure I would have gotten out in time if I had bought.

So catching falling knives is certainly not a reliable strategy. But there's always another one.....

http://finance.yahoo.com/q/bc?s=ETFC&t=3m

[geowhiz]

I did the same thing when ETRADE cratered from $9/share to $3.50/share last month...

Was watching it, thinking WOW, WAY TOO CHEAP, and then in a blink, it gapped up like 50% to about $5.50. Of course, a few weeks later, it was back down near $2. Not sure I would have gotten out in time if I had bought.

So catching falling knives is certainly not a reliable strategy. But there's always another one.....

http://finance.yahoo.com/q/bc?s=ETFC&t=3m


Thats why you take those one-day wonders right to the bank and dont hold-em, an 80% one-day gain on a 5.00 stock is pretty rare. Now I gotta explain this one to richsoon since she wanted in as well.

[PraiseKingGeorge]

Stocks close up on Countrywide talks

BofA reportedly could buy struggling mortgage firm


http://msnbcmedia1.msn.com/i/msnbc/Components/Sources/Art/APTRANS.gif


NEW YORK - A volatile Wall Street advanced Thursday for the second day in a row, as investors found renewed confidence in a report that Bank of America Corp. is close to buying struggling mortgage lender Countrywide Financial Corp.

After seesawing earlier in the day, the Dow Jones industrials finished up nearly 120 points on the afternoon report from The Wall Street Journal. The stock market has been buffeted by concerns about fallout from the mortgage and credit crisis. Countrywide's problems with delinquent and defaulting loans have sent stocks falling even in recent days.

"For the last month, rumors are that Countrywide was going into bankruptcy," said Ryan Larson, senior trader at Voyageur Asset Management. "Any deal with Bank of America is good news, and the market is looking for even a hint of good news these days."

[PraiseKingGeorge]

Bank of America's Countrywide trap

The financial behemoth's $2 billion investment in the mortgage lender is disappearing fast. Too bad its options are limited.

By Roddy Boyd (rboyd@fortunemail.com), writer
Fortune.com


Bank of America CEO Kenneth Lewis isn't looking so smart for investing $2 billion into Countrywide last year.

Countrywide CEO Angelo Mozilo tells investors that the mortgage lender isn't headed for bankruptcy.



NEW YORK (Fortune) -- Late last summer, Bank of America and its deal-hungry chief Kenneth Lewis won kudos for a $2 billion investment in Countrywide Financial, the once high-flying mortgage lender hit hard by the housing slump.

In one stroke, Lewis erased his reputation as a serial over-payer with the kind of convertible preferred stock deal that arbitrage traders dream of. In exchange for its $2 billion, Bank of America secured the right to buy Countrywide (CFC (http://money.cnn.com/quote/quote.html?symb=CFC&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2007/snapshots/372.html?source=story_f500_link)) stock at $18, a tidy 21 percent discount over the price at the time. Lewis, it seemed, had deftly locked in an instant $424 million profit for the bank.

Nobody's congratulating Bank of America these days. As Countrywide shares tank and speculation mounts that the company will be forced into bankruptcy, the bank's stake has plunged in value, to about $560 million. Now Bank of America faces a tough choice: It can buy Countrywide outright, pour even more money into the lender, or simply bide its time and hope for the best.

Whatever it does, Bank of America no longer appears so savvy. And Lewis, who's been criticized for paying top dollar for, among other companies, credit-card lender MBNA ($35 billion) and U.S. Trust ($3.3 billion), is once again looking like a spendthrift.

Bank of America and Countrywide declined comment.

Their deal looked so simple when it was announced in August. In return for its cash, Bank of America (BAC (http://money.cnn.com/quote/quote.html?symb=BAC&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2007/snapshots/164.html?source=story_f500_link)) got a 7.25 percent yield on convertible preferred stock and the right to buy 111 million Countrywide shares, equal to a 16 percent stake. The bank also got the right of first refusal on any future Countrywide deals and stood in front of the creditors' line should the lender go bankrupt.

Lewis and Countrywide CEO Angelo Mozilo, known for his perpetual tan and wide grin, somberly proclaimed the importance of the investment in stabilizing the then-turbulent mortgage secondary markets. The markets seemed to agree.

The celebration didn't last long. The mortgage market has continued to tumble along with Countrywide's stock. Meanwhile, the company faces a barrage of federal and state investigations of its lending and accounting practices. As Countrywide's troubles have mounted, so has speculation that it would file for bankruptcy.

On Tuesday, for the second time in five months, Countrywide was forced to take the unusual move of issuing a press release denying that it was planning to seek protection from its creditors. On Wednesday, the Calabasas, Calif.-based lender released what it claimed was further proof of its stability: The amount of mortgages funded had risen above expectations, which is ordinarily good news.

Investors, however, weren't buying it, and for good reason. Buried deep in Countrywide's release were some troubling numbers: Foreclosures had doubled to 1.4 percent of unpaid principal at its key servicing unit. Late payments also skyrocketed, to 7.2 percent of unpaid balances, up from 4.6 percent. Countrywide shares have plunged 11 percent since this week's damage control began.

Now Bank of America faces a quandary: The value of its investment is falling fast, but any move - whether to buy Countrywide, invest more money, or sit tight - carries a host of potential liabilities.

If it buys Countrywide, Bank of America gets a nationally known franchise and potentially millions of clients for its suite of higher-margin consumer banking offerings, to say nothing of becoming America's most important home lender and the further economies of scale that brings.

On the downside, Bank of America would also get a lender whose credit quality is deteriorating rapidly - and who has sworn off high-margin subprime lending, essentially eliminating what was once its most attractive business. Countrywide is now banking on razor-thin margin conforming loans.

There is also the matter of Bank of America's appetite for Countrywide's portfolio. Ten percent of the lender's portfolio is invested in subprime mortgage securities, including billions worth of securitized and "raw" home equity loans (known as "HELOCS" on Wall Street) and adjustable rate mortgage securities, or ARMS, whose interest rates might prove very troubling to struggling homeowners.

This risky mix may be too much for credit-sensitive Bank of America to stomach. It could try to shed billions of dollars worth of these securities, but finding buyers would be difficult: There's zero appetite for these investments among potential buyers, who would accept nothing short of fire-sale prices. Brokers like Merrill Lynch (MER (http://money.cnn.com/quote/quote.html?symb=MER&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2007/snapshots/865.html?source=story_f500_link)), Morgan Stanley (MS (http://money.cnn.com/quote/quote.html?symb=MS&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2007/snapshots/905.html?source=story_f500_link)) and Citigroup (C (http://money.cnn.com/quote/quote.html?symb=C&source=story_quote_link), Fortune 500 (http://money.cnn.com/magazines/fortune/fortune500/2007/snapshots/309.html?source=story_f500_link)), meanwhile, have their own, well-documented balance sheet problems.

Option B - dumping more money into Countrywide - is unlikely too, at least in the short run. Upping its investment means believing that Countrywide's operating environment is stabilizing or even may slightly improve. To do that, however, Bank of America has to overlook Wednesday's disclosure about rising foreclosure and late payment rates. That won't be easy.
This leaves the third option, the one that Bank of America is most likely to pursue: Keeping its fingers-crossed. Still, it can't be easy for Bank of America's shareholders to watch more than billion dollars evaporate on what was clearly no more than a timing trade on the mortgage market.

They've already watched Bank of America shares fall 25 percent since October, as concerns grow over the health of the U.S. banking sector. http://i.cnn.net/money/images/bug.gif (http://money.cnn.com/2008/01/09/news/companies/bofa_countrywide.fortune/index.htm?section=money_topstories#TOP)

[INRI]

SOLD 1000x CFC @ $8.21


:inlove:

:rock:

:cash:

So, so, so, sorry for the shorts.... NOT

http://finance.yahoo.com/q?s=CFC

Nice Bankroll Warka!!:rock:

[OILMAN]

I been shorting that baby since it
was 17.25 made a wad ........ now
if BOA bought it which the news said
this morning. its time to buy for the
long haul @ 6.25 up up an away.......:party:

[geowhiz]

I been shorting that baby since it
was 17.25 made a wad ........ now
if BOA bought it which the news said
this morning. its time to buy for the
long haul @ 6.25 up up an away.......:party:


I always take the advice of oilfield-trash as gospel! :wave:

[OILMAN]

thats me!!!!:party:
I follow first business almost every morn
on TV those boys pick some real winners
yee haaw!
time to find another shallow infield........
ha ha ha ha ha ! have fun! :party:

[geowhiz]

thats me!!!!:party:
I follow first business almost every morn
on TV those boys pick some real winners
yee haaw!
time to find another shallow infield........
ha ha ha ha ha ! have fun! :party:


Got a couple of NG prospects Ive been working on up in Wyoming. PM me.

[dgi54]

Bank of America is buying Countrywide. Does this mean if I buy Countrywide stock today, it will be traded into Bank of America stock at some sort of conversion rate or will Countrywide still have their own stock? Would you consider this a good time to buy at 6.45



http://money.cnn.com/2008/01/11/news/companies/boa_countrywide/index.htm?postversion=2008011109

[OILMAN]

Rule # 1 you can not always pick a bottom
or a top. I personally think that there will
be some upset in the markets yet which
may affect this stock.once in while i get a
few runs in.. not a home run like i had on CFC
so... in unsure markets tread very lightly
so buy a hundred an sit on them fer a year
an see if the fed can work their magic.
natural resources are where its at in my h.o.
for the next 5 years......:yes:

[removed account per user]

I been shorting that baby since it
was 17.25 made a wad ........ now
if BOA bought it which the news said
this morning. its time to buy for the
long haul @ 6.25 up up an away.......:party:

Excellent work...

I can make a case against buying it here. Sounds funny, because I just bought and sold it, but the story has changed.

BAC has a stack of preferred stock. Now that they are buying out CFC, they basically get to pay the price they want and take the pieces they want.

While the stock will not be at risk of going down below $6, it also won't have much more upside potential. So, it is just going to be a very slow moving investment at this point.

[OILMAN]

I agree it will be a slow mover...

[Low Era]

Just a heads up that Bank of America purchased Countrywide in an "all stock" transaction. If you purchase 1 Countrywide share right now, the exchange is only worth 0.1822 of a Bank of America share. The purchase values Countrywide at $7.16 per share, a 7.6 percent discount to its Thursday closing price, and at just 0.31 times tangible book value.

Check out the article:
http://biz.yahoo.com/rb/080111/countrywide_bankofamerica_1.html?.v=2