Countrywide May End Up in Bankruptcy

By Kyle Chezum Updated on 11/2/2010

11/02/2010

Bank of America's Countrywide unit, which originated 85% of the bank's current bad loans, may opt for bankruptcy as a way out of the mess, claims stock analyst Mike Mayo of CLSA.  Countrywide, though it was acquired by Bank of America, "remains a separate legal entity" and may be able to use the possibility of bankruptcy as a bargaining chip down the line.

Bank of America is facing the threat of forced mortgage buy backs, and nearly all of these buy backs will occur within the Countrywide unit.  It may be advantageous to Bank of America as a whole to allow Countrywide to dip into bankruptcy.

For full story, click here.