By WENDY LEE
Staff Writer
and ALAN ZIBEL
Associated Press
Bank of America said Friday it will buy Countrywide Financial for $4.1 billion in stock, a deal that rescues the country’s biggest mortgage lender and expands the financial services empire of the nation’s largest consumer bank.
The acquisition will make Charlotte-based Bank of America Corp. the nation’s and Middle Tennessee’s biggest mortgage lender and loan servicer.
The buyout, which is subject to regulatory and Countrywide’s shareholders approval, should spare Countrywide from bankruptcy.
It still spells the end of the giant company that had seemed well-equipped until just a few months ago to weather the nation’s falling housing fortunes that had driven scores of its rivals out of business.
Countrywide posted a third-quarter loss of $1.2 billion in October, its first quarterly loss in 25 years.
It was forced to set aside millions in loan-loss provisions and writedowns, and rumors swirled that the company was headed for bankruptcy.
If the largest mortgage lender had gone under, it could have rattled consumer confidence and further weakened the nation’s area’s housing markets, said Tim Davis, owner of Titan Home Loans in Nashville.
“If this (lending crisis) is a storm rolling through Nashville ? it looks like it’s clear ahead,” Davis said Friday.
Bank of America CEO Ken Lewis said in a statement, “Countrywide presents a rare opportunity for Bank of America to add what we believe is the best domestic mortgage platform at an attractive price and to affirm our position as the nation’s premier lender to consumers.”
Bank of America had 5.3 percent of the local market in the first 10 months of 2007, according to First American CoreLogic, which tracks the mortgage industry.
Countrywide was No. 1, with 6.4 percent of the market.
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