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While BofA (BAC) paid just $2.5B to buy Countrywide four years ago, the deal has since cost the...

While BofA (BAC) paid just $2.5B to buy Countrywide four years ago, the deal has since cost the bank over $40B in real-estate losses, legal expenses and settlements with state and federal agencies, the WSJ reported on Friday. BofA could face further legal liabilities $5B as lawsuits rage across the country.
Comments (30)
  • No. 1 Trader
    , contributor
    Comments (47) | Send Message
     
    Why would anyone pay anything for something that is worth nothing? Even worse, buy something that has the potential to cost you more over time and shows no sign of generating revenue.
    1 Jul 2012, 06:24 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2493) | Send Message
     
    Because BAC already owned a portion of it, was acquisition hungry, was encouraged to do so by the Fed, and doesn't have a crystal ball.
    1 Jul 2012, 10:51 AM Reply Like
  • klarsolo
    , contributor
    Comments (705) | Send Message
     
    As the No. 1 Trader I guess you've never ever bought something thinking that it would go up and then it went down instead
    1 Jul 2012, 11:09 AM Reply Like
  • rambler1
    , contributor
    Comments (408) | Send Message
     
    Because Ken Lewis had his head up his a** for so long trying to build the biggest, but far from the best bank.
    1 Jul 2012, 09:40 PM Reply Like
  • Chris Kent
    , contributor
    Comments (276) | Send Message
     
    Nobody needed a crystal ball to see that Countrywide was a junk company, and I don't believe for a minute that the government made anybody buy anything... That's conspiracy theory garbage.
    2 Jul 2012, 04:30 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2493) | Send Message
     
    Encouraged to and made have two different meanings. And at the time I think Countrywide was the largest mortgage originator in the US at the time, so the Fed and other regulators certainly didn't realize it was a junk company until it started to get into financial trouble.
    2 Jul 2012, 05:09 PM Reply Like
  • Getzeman
    , contributor
    Comments (34) | Send Message
     
    I'll be making money on BAC all this year and all next year, too. This story is just history.
    1 Jul 2012, 06:29 AM Reply Like
  • winningtrader
    , contributor
    Comments (2476) | Send Message
     
    Not to worry, the people who made the decision got good bonuses. It is not all doom and gloom.
    1 Jul 2012, 06:38 AM Reply Like
  • bluesmoke
    , contributor
    Comments (782) | Send Message
     
    Why don't they just ask Angelo Mozilo for a low interest loan?
    1 Jul 2012, 08:54 AM Reply Like
  • jypd
    , contributor
    Comments (5) | Send Message
     
    Angelo is too busy working on his tan.
    1 Jul 2012, 01:12 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9928) | Send Message
     
    Simply amazing that Mozilo is not in jail.
    1 Jul 2012, 02:50 PM Reply Like
  • green_valley
    , contributor
    Comments (43) | Send Message
     
    The CEO and BOD are still entrenched getting huge bonuses and making excuses. Fire the bums. Hire new blood. We deserve new management.
    1 Jul 2012, 09:42 AM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (5913) | Send Message
     
    Really? You might want to check on that CEO part. He was forced out a long time ago.
    1 Jul 2012, 09:59 AM Reply Like
  • Mike Maher
    , contributor
    Comments (2493) | Send Message
     
    And by my quick count they have at least 8 new directors since the Countrywide purchase, with 4 being announced in a single day.

     

    http://bloom.bg/N1ZLOw
    1 Jul 2012, 10:50 AM Reply Like
  • msphar
    , contributor
    Comments (161) | Send Message
     
    this is sort of old news...
    1 Jul 2012, 11:07 AM Reply Like
  • GaltMachine
    , contributor
    Comments (1135) | Send Message
     
    "The bitterness of poor quality lingers long after the sweetness of low price is forgotten."
    1 Jul 2012, 11:11 AM Reply Like
  • Jeremy Johnson, CFA
    , contributor
    Comments (779) | Send Message
     
    Too true.
    1 Jul 2012, 12:06 PM Reply Like
  • A Bit of Value
    , contributor
    Comments (29) | Send Message
     
    The risk of BAC's countrywide lawsuits getting a lot worse have been considerably reduced (http://seekingalpha.co...). It seems like the WSJ article was written during the week and they didn't bother updating it after the ruling on Thursday, which really started being understood and getting attention Friday after hysteria over the ACA ended.
    1 Jul 2012, 12:33 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8304) | Send Message
     
    BAC owns 12% of America's performing mortgages.

     

    As the housing market stabilizes, this liability will become an asset as those performing mortgages deliver tens of billions of dollars of cash to BAC shareholders during more normal periods.
    1 Jul 2012, 01:17 PM Reply Like
  • GaltMachine
    , contributor
    Comments (1135) | Send Message
     
    DeepValue,

     

    "As the housing market stabilizes"

     

    That's a very astute comment assuming the premise is correct.

     

    I think many credible analysts have said the bottom is in for housing, however I think Gary Shilling has it right and if he does these mortgages will become less valuable.

     

    Only time will tell.

     

    Good luck!
    1 Jul 2012, 02:38 PM Reply Like
  • Nmidair
    , contributor
    Comments (13) | Send Message
     
    Ken Lewis spent a few days if they spent any discovery time at all in the decision to buy Countrywide. He wanted to be king of the largest company in the USA. He didnt check into Merrill either. His incredible ego fueled this, and the yes men directors just showed how incompetent they are. They have 12 more directors that should have been fired long ago. I just dont understand why BAC didnt bankrupt on Countrywide 2 to 3 years ago.
    1 Jul 2012, 01:41 PM Reply Like
  • bill d
    , contributor
    Comments (1884) | Send Message
     
    USA.
    1 Jul 2012, 02:10 PM Reply Like
  • Goodguy36
    , contributor
    Comments (78) | Send Message
     
    No. 1 Ever heard of politics??
    1 Jul 2012, 02:58 PM Reply Like
  • Colin Doyle
    , contributor
    Comments (708) | Send Message
     
    Wow, this story is cutting edge. No one has ever told it before. *sarcasm*

     

    It looks like someone wants to push the BAC share price down a bit further so they can keep accumulating at lower prices. I'm glad I bought almost every BAC share I own at under $7/share.
    1 Jul 2012, 03:55 PM Reply Like
  • James Myung
    , contributor
    Comments (264) | Send Message
     
    Thank you Ken Lewis for bringing the share price down. Thank you.
    1 Jul 2012, 11:36 PM Reply Like
  • Josh ODonnell
    , contributor
    Comments (229) | Send Message
     
    Believe in America and our capitalist state! Just dont believe the people who are 'sorta' running it.
    2 Jul 2012, 06:51 AM Reply Like
  • green_valley
    , contributor
    Comments (43) | Send Message
     
    One of the directors was Brian Moynihan. How smart was/is he? From the Good Ole Boys club.
    2 Jul 2012, 08:41 AM Reply Like
  • msphar
    , contributor
    Comments (161) | Send Message
     
    Moynihan seems to be doing a journeyman job of it.
    I am sure it is not easy running a company with a 2.18 trillion dollar balance sheet.
    3 Jul 2012, 04:41 PM Reply Like
  • No. 1 Trader
    , contributor
    Comments (47) | Send Message
     
    Mike Maher, You didn't need a crystal ball to see the writing on the wall. Mortgages were already starting to crumble BEFORE the purchase by BAC. Why would anyone want to buy a mortgage company that is full of failing assets/non performing loans? Why would you need a crystal ball for this. I was recommending dumping "C" at 52.00 pre split. Genius? Hardly. Crystal ball? No. THE WRITING WAS ALL OVER THE WALL! Alan Greenspan kept interest rates to low causing home prices to skyrocket because people could afford to pay more. I know he had his arm pushed up behind his back. Thats politics. It's called Hot Potatoe and someone would eventually get stuck with it.
    4 Jul 2012, 11:02 AM Reply Like
  • green_valley
    , contributor
    Comments (43) | Send Message
     
    We've had Brian Moynihan for three years after the debacle and he has been making bad to worst decisions. 2 trillion dollar company is 1.9999999 trillion too big for him to handle. What do you expect from an attorney? Imo, he treats BAC as a client and he ain't telling S/Hs anything except bs and giving customers the shaft. We have been stuck and things are still as cloudy and murky as before.
    5 Jul 2012, 09:20 AM Reply Like
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