BREAKING NEWS: Is $4 Billion Too Much for CW

C-4 Joined: 19 Jul 2007 Posts: 1468

Hot off the Press -

$4 Billion
Less than $7 a share
Stock transaction

$72 mill for the Tan Man (O-U-T after transistion)

Try to wrap up the deal in 3Q 2008

http://www.nytimes.com/2008/01.....1bank.html

Countrywide Financial, the troubled lender that became a symbol of the excesses that led to the subprime mortgage crisis, is close to being acquired by Bank of America for slightly more than $4 billion in stock, people briefed on the transaction said Thursday.

Directors for both companies have approved the deal, which is expected to be announced Friday, these people said.

Posted: Fri Jan 11, 2008 4:58 am

BANK OF AMERICA STOPPED WORKING WITH MORTGAGE BROKERS SO ITS BAD FOR BROKERS CAUSE WE GAVE SO MUSCH TO COUNTRYWIDE IN BUSINESS AND NOW BANK OF AMERICA WILL DISMANTLE IT...I WONDER IF JOBS WILL BE LOST AS WELL...SINCE CFC HAS BAOUT 30,000 EMPLOYEES...

Posted: Fri Jan 11, 2008 5:06 am

Thanks for the link, I tried to count the Mozillions it is gonna cost BAC on the other thread.

Let's get the poll going, Is $6 billion total investment enough for CW
not enough for CW
just right for CW?

great quote:
“This will be great for Countrywide,” Mozilo told an interviewer, “because at the end of the day, all of the irrational competitors will be gone.”

Posted: Fri Jan 11, 2008 5:14 am

he thinks its enough..or has he HAD enough???

Posted: Fri Jan 11, 2008 5:24 am

Methinks he Knew it was too much to pass up the deal. Ride that 72million dollar golden parachute you orange man!

C-4 Joined: 19 Jul 2007 Posts: 1468

MortgageMoma: Please realize that ALL Banks will be closing down wholesale. You seem kinda shocked by this.

The business model that you have known - NO LONGER EXISTS.

p.s. CFC has 50,000 employees

Posted: Fri Jan 11, 2008 5:55 am

1 More Thing wrote:

MortgageMoma: Please realize that ALL Banks will be closing down wholesale. You seem kinda shocked by this.

The business model that you have known - NO LONGER EXISTS.

p.s. CFC has 50,000 employees

May read "had 50,000" in a short time. Good luck ops and wholesale side, scramble for the available retail slots quick.

Dyn-o-mite! Joined: 18 Dec 2007 Posts: 280

1 More Thing wrote:

MortgageMoma: Please realize that ALL Banks will be closing down wholesale. You seem kinda shocked by this.

The business model that you have known - NO LONGER EXISTS.

p.s. CFC has 50,000 employees

I think the closing of wholesale lines is based on the lack of capital all of the banks have. The current crisis is a capital problem, as banks/investment banks had to write down CDOs to mark to market (what they are worth) not market to model (hypothetical guess) and you need capital to write down assets. Otherwise your BK. This is what happen to CW.

The business model for wholesale will be changed, but once the big banks have the capital again, they will have to get back into wholesale. I don't see all of the brokers going to work retail for banks. When wholesale lines open, the pricing will be risk adjusted and very difficult to make a $.

C-4 Joined: 10 Dec 2007 Posts: 1454 Location: Dallas

Mortgage Momma is dead wrong, there are still many mortgage lenders out there that are stricktly wholesale and are not interested in retail at all. If you are not using them, those of us who are are killing your quotes.

One particular lender is a full discount point below the rest of the market daily.

Of course, they are Apaper only, if you are stuck in Alt-A or government lending, you might look for another career.

Dud? Joined: 05 Dec 2007 Posts: 16 Location: Nashvegas!

Unfortunately there will be a lot of job losses because of the merger. However I tend to think the CW arm will continue wholesale business. At least I hope so because if not there will be a lot more lenders added to the imploded list because there are still a lot of companies acting as a pass through to CW.

Here's the story from cnnmoney.com.

http://money.cnn.com/2008/01/1.....tm?cnn=yes

Good luck to all the B of A and CW employees.