Posted on 08/22/2007 10:22:24 PM PDT by TigerLikesRooster
Bank of America to invest 2 bln dlrs in troubled mortgage giant
Financial titan Bank of America said late Wednesday it had agreed to invest a hefty two billion dollars in troubled US mortgage giant Countrywide Financial Corporation.
Countrywide Financial, America's biggest mortgage company, has seen its finances stretched by an industry-wide liquidity squeeze amid a nationwide housing downturn.
Surging home foreclosures have forced other home lenders out of business and sent shock waves through the multi-trillion dollar mortgage sector.
"We believe that in the current turmoil the stock market has been underestimating the value in Countrywide's operations and assets," Bank of America's chairman and chief executive Kenneth Lewis said in a statement.
Bank of America said it will invest two billion dollars in Countrywide Financial in the form of special securities which can be converted into stock at 18 dollars per share.
Lewis, who has overseen an aggressive expansion by Bank of America which has seen it grow into the country's second-largest financial institution behind Citigroup, said the move should also boost liquidity in the mortgage market.
Despite Countrywide's vast size it has been struggled to weather the financial storm battering mortgage firms across America.
Its stock price has plummeted and it was forced last week to seek an 11.5 billion dollar credit line from 40 major banks to boost its stressed finances.
The mortgage industry has been buffeted by fears about the health of the home-lending market which have rippled stock markets around the world.
Investors have shunned mortgage firms and mortgage-backed securities contributing to the industry's credit crunch.
because they plan to do to it what Gorden Gecko planned to do to Blue Star airlines.
Hmm...
Well, they are giving away credit cards to illegal immigrants, so why not simply hand out more money? BoA has HUGE contracts with the U.S. government so they are practically giving away OUR MONEY like a drunken sailor during liberty in Bangkok.
My mom is former BOA employee she told me about she been rumor that they were going buy last YEAR TIGER
is it going to turn out that the ultra rich forced the market down, caused hysteria so more money would be released and then with prices down, went in for the kill?
does the little guy even have a chance anymore?
Bank of America may already be owed a very large amount of money by Countrywide and cannot afford to let them default. It's also very possible federal regulators are putting pressure on BofA to inject the money.
If you owe someone $1,000 you cannot pay, they can easily take collection action against you without concern. If you owe someone $500 million, they will do everything possible to see that you remain in business to pay them back.
Oh no problem she told me they going buy last year but something happen the deal didn’t go through now it going bankrupt so BOA said let talk business SHALL WE
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