Calabasas-base Countrywide Financial Corp. was the subject to rumors of a takeover by Bank of America Corp., which invested $2 billion in the struggling lender last August. “For the last month, rumors are that Countrywide was going into bankruptcy,” the Associated Press reported that Ryan Larson, senior trader at Voyageur Asset Management, said. Countrywide denied earlier this week that it would file bankruptcy. The current market value of Countrywide is around $3 billion, approximately two months’ profit for Bank of America, the Wall Street Journal reported. Countrywide stock has suffered under the growing default rate and increasing foreclosures impacting it and other mortgage industry firms. “Any deal with Bank of America is good news, and the market is looking for even a hint of good news these days,” Larson said. The stock market responded up 120 points after the Journal cited sources close to the deal saying it could happen “very quickly.” Thursday, Countrywide stock rose 51 percent, up 2.63 to 7.75. The August transaction had the Charlotte, N.C.-based Bank of America buying $2 billion of preferred shares of Countrywide which was convertible into a stake of more than 15 percent in the lender. Since then, defaults have continued to plague the mortgage industry. The Journal reported that bank has first right of refusal in any sale of Countrywide, and Bank of America has a long history of opportunistic takeovers of banks facing distress, buying La Salle Bank of Chicago for $21 billion in September.
