Calling it “a steal” and doubling down on the soon-to-be imploding housing market, Lewis and BofA acquired Countrywide Financial in Jan. 2008 – a month after the recession began – for $4 billion.
With 1,000 field offices, a sales force of nearly 15,000 and a portfolio of nine million loans worth $1.5 trillion, Countrywide was the nation’s largest mortgage lender. Countrywide was also one of the biggest originators of subprime and other shady loans.
However, BofA, which had already invested $2 billion in Countrywide in August at $21.82, ended up lowering its original offer by 37% to $2.5 billion, or just $4.85 a share, amid fears about future writedowns.
“With the benefit of hindsight, no one wants to be anywhere near Countrywide,” said Charles Whitehead, a professor at Cornell.
As mentioned above, heavy mortgage losses led BofA to require government assistance and its stock eventually plummeted to 24-year lows. (REUTERS/Kevin Lamarque)