It sure was good news for Countrywide and anyone owning shares in the company.  Here's another god analysis of the situation:  http://www.thestreet.com/_htmlmdb/newsanalysis/banking/10375870.html

The problem is consumer confidence, will it hurt countrywide? I know that I would not place a loan with Countrywide right now. Who knows if the loan will close? It's possible that they come out of this smelling like roses but would you gamble that your loan or your customers loan will close with all the concerns over the past few weeks? Also I think B of A made a bid not so long ago to buy countrywide? Maybe there is a bigger plan here?

I suspect this is "smoke and mirrors".  The press release specifies that they purchased "preferred stock" which has a guaranteed return on investment, even in the event that Countrywide declares bankruptcy.  If this were a serious investment BOA would have purchased "common stock".

Jason: Thanks for adding that article.  It delves a little more into the story and gives us more of an understand of what has happened.

Leo: You have a good point about not using CW right now.  I know that consumer confidence is pretty low for them, but hopefully they will overcome this hard time.

I've also heard the rumor about the desired purchase of CW by B of A, but their stock purchase was for non-voting shares.  Maybe it's their foot in the door.

Larry: I'm sure we'll find out in the near future.

the real deal here is that country wide is some serious trouble.  They have used up most of their warehouse lines and are subject to some serious deliquencies next year when the option arms start to have their negative am adjustments.  Bank of America and Countrywide have talking for a year now about a merger.  This deal allows Bank of America to ease into it and refocus the direction until they can buy more of the company.  They currently now own 16% of the stock and a seat on the board.

Michael Mapes

Michael:  I didn't realize that B of A was already so involved with Countrywide.  As long as they are stable, then things will work out.  If CW has to be bought for things to settle down and stabilize, then that's the best thing all around. 

Michael:  I didn't realize that B of A was already so involved with Countrywide.  As long as they are stable, then things will work out.  If CW has to be bought for things to settle down and stabilize, then that's the best thing all around. 

Agreed Jim and Maria.  Whatever needs to be done to get things settled down and stabilized, it is best for everyone.

We will be seeing a lot more banks and lenders reevaluate thier residential mortgage position before it's all over. Remember: The biggest waves are during the biggest storms - Are you surfing the wave or wiping out?

Brian: What a great analogy.  And so true :)