Wednesday, January 30, 2008

Bank of America & Countrywide Still Getting Married

just-married-on-limo-backside.jpgBank of America and Countrywide Mortgage are still expected to trip happily down the merger aisle later this year. Even with speculation growing rampant in the last few days that the deal would fall apart, one of BofA's big cheese types said this week that he's still in love.

NEW YORK (MarketWatch) -- Bank of America Corp.'s chief executive said Tuesday that despite significantly larger losses that reported earlier Tuesday, the bank will forge ahead with the acquisition, saying that the planned deal is still "a go."

This heartens me. I think that BofA is playing the role of the typical savvy investor. The age-old maxim of "Buy low, sell high" sticks around because it's true. BofA surely doesn't intend to sell, but the "buy low" part still sticks. Acquiring Countrywide will make BofA the nation's largest mortgage lender for the cost of about $4 billion. That's not chump change, but for BofA it's not pie in the sky either. They obviously see a long-term return in taking over Countrywide's top lender spot.