Thomas Frankito alluded to an arrangement between Bank of America and Countrywide in his blog post entitled "Bank of America Looking at Countrywide", back on January 30, 2007.
Clearly there were signs of strain to those in the industry. Those who understood the make up of Countrywide's portfolio of loans and the ensuing challenges they would face in the coming months. Here we are nearly eight months later and Bank of America exercises its right to invest in the embattled mortgage lender, to the tune of 2 billion dollars, according to The Wall street Journal. Not much is being said about discussions between the two business concerns. In point of fact there has been no information on discussions prior to the equity investment or relative to future business dealings between the two.
Can those of us in the industry breath a sigh of relief? hard to say as it is yet to early in the game. The option arm product fallout has not seen its zenith yet. what we can glean from this, is hope for consumer confidence to begin to turn the corner. Confidence that will send a positive signal to wall street and result in more sound real estate investment for owner occupants, investors and most of all sellers. It is my hope that this is the beginning of the stemming of the bloodletting of Countrywide. Perhaps this alliance will spur other efforts to reposition the mortgage giant. We cannot afford as a nation, nor less we forget th global ramifications of the failure of a concern such as Countrywide, as alluded to by Brain Brady in Bailing Out Countrywide- Is it 1980 All Over Again?.
This infusion of cash, I for one think "It's A Good Thing", to quote Martha Stewart. This one is to be watched very closely.