Acquisitions

by Claudia Sonea

After Wall Street session on Tuesday and the stocks plunging, there were rumors of Countrywide Financial being on the edge of bankruptcy. Even though, the mortgage lender denied it, analysts say that regulators are accepting its buyout precisely to avoid bankruptcy. On the site of The Wall Street Journal and The New York Times there is mentioned that Bank of America Corp. is in talks to acquire Countrywide, the country's largest mortgage lender that lost a lot of money due to the sluggish housing market. After announcing that the country would falter if they don't get $4 million infused in their capital, Sean Egan, managing director of independent ratings firm Egan-Jones Ratings Co., said that the buyout is the only reasonable solution. Nevertheless, such a transaction requires Fed's approval and the bank regulators refused to give any comments on the matter. Furthermore, the federal law prohibits for any bank to make acquisitions that would increase a bank's market share to 10 percent of U.S. deposits and the increase of Bank of America market share would be 9.88. Bart Nater, a San Francisco-based senior analyst with consulting firm Celent, expressing the opinion of banking industry experts, stated that it is no one's responsibility to solve the problems of the largest mortgage originator in the country. Regulators are concerned of the implication of Countrywide's collapse and who's going to collect the mortgage for millions of US home loans. There are no clear or sure news of such talks being held between the two mentioned previously, both Bank of America, which took last summer a 16 percent stake in Countrywide, and the mortgage lender refused to give any comments. On Thursday The New York Stock Exchange asked Countrywide to issue a public statement explaining the unusual trading activity that changed from plummeting its stock's price into raising it. Until now, there are mere speculations, therefore, stay connected this sound promising.

related story: http://news.yahoo.com/s/ap/20080110/ap_on_bi_ge/countrywide;_ylt=AlDH0ojwKYKSnChF27gKKBGs0NUE

by Claudia Sonea for PocketNews (http://pocketnews.tv)

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Posted by: Maria Vidlickova

Labels: Acquisitions, CantellTV, Chris Cantell, Christopher Cantell, digital broadcasting, SigEx Foundry, SigEx Telecom