Karl Denninger

Is Countrywide Financial Headed for Bankruptcy?

This is very serious.

It appears that bondholders have finally woken up. The only problem is that CFC was likely insolvent when assumed, BUT BAC's reason for wanting this deal was basically to "peel off" the servicing side, which has value, if it survives.

Well, how do you spell "fraudulent conveyance"? You can't just do that and leave the bondholders "holding the bag"; there is, however, a timely requirement on doing something about it.

Looks like some lawyers finally woke the hell up and said "heh, you know, if we sit on this long enough, we might get estopped. That's bad. Let's file now."

Uh huh.

This could get to be a lot of fun.