Remember when Bank of America bought Countrywide in 2008 and CFC Chief Executive Officer/Oracle Angelo Mozilo said they wouldn’t be sorry and it wouldn’t be long before BofA would “reap what Countrywide hath sowed“? He wasn’t kidding and now, finally, BAC and Ken Lewis, the guy who had the foresight to do the deal, are having their vision and skills recognized.

Bank of America thought it had a bargain four years ago when it paid $2.5 billion for tottering mortgage lender Countrywide Financial Corp. But the ill-fated decision has already cost the Charlotte, N.C., lender more than $40 billion in real-estate losses, legal expenses and settlements with state and federal agencies, according to people close to the bank. “It is the worst deal in the history of American finance,” said Tony Plath, a banking and finance professor at the University of North Carolina at Charlotte. “Hands down.”

Bank Of America’s $40 Billion Mistake [WSJ]

46 comments (hidden to protect delicate sensibilities)
Show all comments ↓

Comments (46)

  1. Posted by Don Henley, CFA | June 29, 2012 at 2:01 PM

    Some dance to remember, some dance to forget.

    Looks like Ken will be going with option #2 tonight?

  2. Posted by HungryIntern | June 29, 2012 at 2:09 PM

    Worst deal ever? I am not sure about that…

    ~Solomon Brothers

  3. Posted by Strong Sell | June 29, 2012 at 2:14 PM

    Yea seriously – what a shitty deal. Who would do something so stupid?

    – Richard Parsons

  4. Posted by reospeedwagon916 | June 29, 2012 at 2:16 PM

    I know right?

    -ABN Amro

  5. Posted by PermaGuestII | June 29, 2012 at 2:18 PM

    What do you mean- it sounds great!


  6. Posted by B. Iksil | June 29, 2012 at 2:20 PM

    $37.5B loss? Interesting…

  7. Posted by Beerio | June 29, 2012 at 2:23 PM

    42.5 billion but other than that I have no concerns.

  8. Posted by guest | June 29, 2012 at 2:23 PM

    jerry levin. fixed it for you.

  9. Posted by Guest | June 29, 2012 at 2:25 PM

    Was thinking the same thing

    – Chris Flowers

  10. Posted by Guest | June 29, 2012 at 2:25 PM

    Me too.

    – Guy Hands

  11. Posted by Pietro_F | June 29, 2012 at 2:28 PM

    We don't find it necessary to Broadcast our successful deals.


  12. Posted by Golden Wreck | June 29, 2012 at 2:32 PM

    Hey don't forget about us.

    Ken Thompson and Marion Sandler

  13. Posted by Guest | June 29, 2012 at 2:37 PM

    You gotta spend money to make money

  14. Posted by gab | June 29, 2012 at 2:41 PM

    Not to nitpick,but it's Salomon, with an "a"

    UBS spelling nitpicker quant

  15. Posted by Guest | June 29, 2012 at 2:43 PM

    Don't forget about all we've managed to accomplish together since 1998.

    – Union Bank of Switzerland & Swiss Bank

  16. Posted by Steve Case | June 29, 2012 at 2:44 PM


  17. Posted by B. Iksil | June 29, 2012 at 2:49 PM

    That's why I only lost $2b not $5B

  18. Posted by guest | June 29, 2012 at 2:51 PM

    60 Dutch Guilders worth of trinkets for Manhattan. No regrets there.

    ~The Wappinger Tribe

  19. Posted by Guest! | June 29, 2012 at 2:52 PM

    Whew! Glad he said "American" finance.

    Freddy G.

  20. Posted by HungryIntern | June 29, 2012 at 2:55 PM


  21. Posted by Guest | June 29, 2012 at 3:07 PM

    I'd like to hear what Dick Bove has to say about this.

  22. Posted by structured prods | June 29, 2012 at 3:10 PM

    Well now, you ain't seen nothin' yet.

    – Ben S. Bernanke

  23. Posted by Guest | June 29, 2012 at 3:12 PM

    He was talking about the ski manufacturer. Their deal needed a lift as well.

  24. Posted by MHA | June 29, 2012 at 3:13 PM

    Mr. Welch, it's Kidder Peabody on the line for you.

  25. Posted by NakedShort | June 29, 2012 at 3:23 PM

    Another shitty deal for me to look at!

    -C. "No Relation" Levin

  26. Posted by Dumbass Oil Trader | June 29, 2012 at 3:26 PM

    You have to have deep pockets to be a player.

  27. Posted by Abe_Froman_ | June 29, 2012 at 3:51 PM

    Is that the Strawberry Hill?

  28. Posted by ted turner | June 29, 2012 at 4:00 PM

    uh, hello?

  29. Posted by Solomon | June 29, 2012 at 4:08 PM

    Hey! Its not like my haircut was a great deal either…

  30. Posted by guestoron | June 29, 2012 at 4:09 PM

    Hell no it's Sun Peak Peach

  31. Posted by guest | June 29, 2012 at 4:18 PM

    "in finance." that's the qualifier. otherwise, yes, aol-time warner probably wins.

  32. Posted by Guest | June 29, 2012 at 4:34 PM

    Worst deal ever? What about buying a steaming pile of option arms at the peak of the housing bubble, driving the 4th largest US bank and 11th largest globally into insolvency (and into the hands of a hick from Minnetonka)?

    -guy who overheard Ken Thompson complain about all the WB short sellers

  33. Posted by Jamie D | June 29, 2012 at 4:38 PM

    Your telling me At $118.00 a piece I could have bought 360,169,491 National Panthems from Bonobos instead of Countrywide?

  34. Posted by Major Award | June 29, 2012 at 5:24 PM

    [youtube OMGnRayA_U8 youtube]

  35. Posted by Guest | June 29, 2012 at 5:26 PM

    tough but fair

  36. Posted by Matt's brother | June 29, 2012 at 5:30 PM

    1/15/08 Businessweek interview w/ Kenny about the Countrywide acquisition:

    There is some epic BS in there including "if you look at our projections, in the third full year of ownership, 2011, we think we should be making $2billion aftertax"

  37. Posted by Ghost of Countrywide | June 29, 2012 at 6:06 PM

    Current projections for the CW legal liabilities are in the $50 billion range and still growing….definitely will kick Kenny in the nuts if I have the good fortune to bump into him.

    -bitter ML guy

  38. Posted by guest | June 29, 2012 at 7:20 PM

    well, you could have stayed independent. and by "stayed independent" of course I mean "watched ML stock go to zero and file for bankruptcy."

  39. Posted by 2005-2007 PE LPs | June 29, 2012 at 7:24 PM

    as owners of TXU and a host of other now underwater PE assets, we'll just see about that.

  40. Posted by guest | June 29, 2012 at 7:26 PM

    this will be after you run into and kick the nuts of stan o'neal and everyone else on ML's executive committee and board, who are the reason countrywide is your problem to begin with, right?

  41. Posted by Xenomorph | June 30, 2012 at 12:08 PM

    Well done, that's how I like my steak boy, I said pay attention I said, well well done

    – Foghorn Longhorn

  42. Posted by Mwuahaha | June 30, 2012 at 12:11 PM

    I've seen it all, and OVERSEEN it all

    – H Paulson

  43. Posted by JOmomma | June 30, 2012 at 12:17 PM

    If you'd replaced names with buzzwords like 'executive compensation', you'd have been branded an ows tool. Apparently this is personal and business. Interesting

    – OPCO rhetoric group head

  44. Posted by The Dealer | July 1, 2012 at 2:52 AM

    AOL + TWX? How soon we forget …

  45. Posted by cheap seo services | September 12, 2012 at 3:43 AM

    N8lGNc Wow, great article post.Really looking forward to read more. Cool.

  46. Posted by finance | October 6, 2012 at 11:40 AM

    Tony Plath is a brave man and have the capability to analyze things on better stages.