If the announced planned merger of [tag]Bank of America[/tag] and [tag]Countrywide[/tag] Financial Corp goes through, BofA will be involved in about one in every four mortgage loans in the United States.
One in four!
Now one way to look at this is, this is a good thing. It will probably rescue Countrywide -described by the New York Times as, “the troubled lender that became a symbol of the excesses that led to the [tag]subprime mortgage[/tag] crisis.”
Another way to look at this is bad…bad news for the U.S. [tag]economy[/tag] and one of the biggest signs to date just how fast it is sinking beneath a tidal wave of For Sale signs.
Why?
Because the head of BoA ,Kenneth Lewis, has been quoted as saying that, although his bank always wished to be a much bigger player in mortgage banking, he wouldn’t even think of buying up another mortgage lender, such as Countrywide, “until blood is running in the streets.”
Guess the blood has started to gush enough to get Bank of America’s interest.
Meantime, the damage done by the subprime mortgage fiasco just keeps getting worse with no end in sight.
The head of the Federal Reserve is now painting a really bleak picture of the economy, a real about face from only a few months back.
Says Ben Bernanke, “The outlook for real activity in 2008 has worsened.”
With that very much in mind, [tag]Bernanke[/tag] has suggested that the Fed might make yet another, bigger cut in interest rates and real soon.
That’s good, because American consumers are not exactly happy campers right now.
The biggest retailers in the nation are saying that their holiday sales gains are weaker now than any time in the past five years.
But even that may be too little and much too late, which may force Congress to step in and do what it always tries to do when capitalism runs amok: slap government controls on parts of the economy.
Remember how when word of the subprime mortgage problem first really got the attention of the public and news media, it seemed a somewhat localized problem with a quick fix provided by slightly lower Fed rates the obvious answer?
Well, forget that. This has turned into a global [tag]credit crunch[/tag] leading to the forced resignations of some banking and mortgage lending giants’ chief executives, not to mention the almost certain prospect of tens of thousands, if not millions, of homeowners on the cusp of foreclosure.
So, I say, bless Bank of America for buying the United States. Heck, it might as well snap up Canada and Mexico while it’s at it.
That way, if nothing else, everyone will save on those nasty ATM fees cause we will all be customers of Bank of America one way or the other.
Related posts:
- Free Credit Reports Now Available in All 50 States
- Is Investing in Real Estate in Other States a Good Idea?
- The Richest Real Estate Billionaires in America Should Check Out Hinsdale, Illinois
- Most Expensive House in America: For Sale!
Article Author: Charles FeldmanCharles has written 179 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.
Joshua Dorkin
{ 5 comments… read them below or add one }
You sure nailed this one bag on. Then JPM follows up with a save of their own. You can bet the troubles ahead of us are serious indeed!
Kinsey Barnard
To make matters even more annoying for American consumers, I noticed that BoA increased its ATM fee from $2 to $3 the last time I visited one of their ATMs about two weeks ago. Fortunately my account is with USAA, which means that such fees are reimbursed to me at the end of every month. USAA has a fairly generous limit of 10 ATM transactions per month with automatic fee rebates even for using other banks’ ATMs.
A couple of years ago a friend really encouraged me to get a job as a loan person with countrywide. I own my own business and happy with what I do so never considered it seriously. But now I just shake my head to think of what if I had taken the leap. Ouch.
To Followup on Karl’s point above, the atm industry is overly saturated. All these owners are raising their atm fees. They just arent making the revenue that they use to.
That way, if nothing else, everyone will save on those nasty ATM fees cause we will all be customers of Bank of America one way or the other.
{ 1 trackback }