Countrywide Has Reversal of Fortune on Bank of America Rumors

CALABASAS, Calif. – Shares in Countrywide Financial soared more than 50% yesterday on rumors Bank of America is negotiating to buy the home loan giant.
 
Countrywide shares, on a roller-coaster this week, closed up $2.63 at $7.75, after word of the BofA talks leaked. Earlier this week, Countrywide shares slumped by roughly the same amount on rumors, eventually denied, the company was preparing to file for bankruptcy.
 
A BofA deal would salvage some of the banking giant’s losses in Countrywide, in which it invested $2 billion for shares convertible at $18.50 each earlier this summer, leaving BofA with a loss of more than $1 billion on the investment.
 
Countrywide is the nation’s largest mortgage lender and provides correspondent lending for hundreds of credit unions.