Countrywide Could Cost Bank of America $100 Billion

Sep 10, 2011
J. Webster
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David A. Geracioti, editor in chief of Registered Rep magazine and told CNBC Countrywide could cost Bank of America $100 billion – says loans they made were excrement:

Yet it also has one big, fat albatross on its balance sheets: Countrywide Financial. Bank of America acquired Countrywide for $4 billion, a deal that has proven a huge headache not just in dollars and cents, but in terms of the bank’s reputation.

“Basically all the mortgages that Countrywide produced from 2004 to 2007 were excrement,” Geracioti says. “The question is: What are Bank of America’s liabilities from Countrywide? Some say $100 billion, others say, ‘Who knows?’ The liabilities could be ginormous. The government is hassling the bank in a big way.”

That’s the big fear with Bank of America, nobody knows what their liabilities will be for the genius Countrywide purchase. Also, some say the lawsuits from shareholders will start to hit the bank too. And it seems like they have every right to sue a bank who made a $4 billion purchase that could end up costing them $100 billion.

However, Geracioti still likes the Bank of America as a customer, he said they lowered the rate on his credit card – “by a lot,” he said.

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