Another Countrywide Bailout?

Author:
Updated:
Original:

It's no surprise that Countrywide Financial Corp. is still financially challenged despite last month's 2 billion bailout by Bank of America. More surprising is the news that more banks are jumping on the bailout bandwagon.
This morning the New York Post reported that another multi-billion dollar bailout plan is in the works for the nation's largest home lender. "Sources familiar with Countrywide's plans said the lender continues to work with Goldman Sachs and law firm Wachtell Lipton Rosen & Katz to structure another strategic investment similar to the deal Bank of America struck last month," the Post's Zach Kouwe reports.
No one yet knows who is behind the bailout, although there is some speculation about JP Morgan and Citigroup. Sources we spoke to this morning say that Goldman has been selling the bailout with a pitch meant to scare banks about the broader housing and mortgage market. The idea is that Countrywide is too big to be allowed to fail, and that if it goes down it might end up causing major collateral damage for anyone with mortgage lending exposure.
Countryslide [New York Post]

Related