I'm going to file this one under comedy. Former Bank of America CEOs(actually former CEO's by way of NCNB, Nations Bank and finally, in McColl's case BofA) have published a letter today, backing Ken Lewis's decision to buy Countrywide. From Bloomberg News;
Acquiring Countrywide puts the bank “in a unique position to take advantage of one of the few bright spots in the entire industry right now: the surging market for mortgage financing that is being fed by extremely low interest rates,” Hugh McColl Jr. and Thomas Storrs said in a letter published today in the Charlotte Observer.
Good Lord! It's not like BofA didn't already have a monster mortgage origination machine. Buying Countrywide saddles BofA with a $ trillion mortgage servicing portfolio that, while once considered an big asset, is now a big pain in the ass because it costs more (in money and in human resources) to service the $billions of loans in various stages of delinquency or default than the fee the servicing arm gets to perform these functions. Maybe some of this will be offset once Obama's mortgage rescue plan starts handing out $1,000 per loan modified (and $1,000 a year for three years if the new loan stays current). Still, between the servicing and the Countrywide law suits,I think if BofA had to do it all over again they just might have passed on the trade. Just a hunch.
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