This is a major commitment to the mortgage market by a leading US financial institution. Bank of America is putting its corporate weight, and its money, where its mouth is. By making this acquisition, BofA is saying that they are in the mortgage market for the long run. They will most likely be stuck with some very large losses that are still hiding in the Countrywide portfolio but they will be able to overcome the problem that has caused the cessation of business for many mortgage lenders. Funding! If you are a lender and you have a qualified borrower, but you can’t find cash to fund the loan, you have a problem. BofA has and will continue to have the funds required to be a major player in the mortgage market. My guess is that they bought Countrywide for a price that will make the BofA shareholders very happy in time. Other mortgage providers will be forced to take agressive steps to remain competitive.
This is good news for the real estate market.
Tags: business, finance, lending, real estate
January 11, 2008 at 6:57 pm
[...] John Juarez, an agent with Coldwell Banker in Fremont, states that this will help the competitiveness of the mortgage industry and makes a statement from B of A that they are in the mortgage industry to stay. [...]