BofA Purchases Countrywide

When a real estate market falls apart, there is often a particular issue that is blamed. In this case, of course, it is the subprime market collapse. Once blame has been allotted, things slowly start to turn around and there is usually a magic point at which things start to stabilize and recover. Once can certainly argue that this is the case with the news that Bank of America will purchase Countrywide Financial. Countrywide is one of the biggest subprime lenders and has taken a beating. It has also been run up and down the flagpole in the media. This purchase, although being met with scepticism, nonetheless may represent the first turning of the mortgage market. It would appear BofA thinks it is worth getting back in since it is committing four billion dollars to the purchase. If the mortgage market is seen as stabilizing, the real estate market will surely soon follow. In short, we are talking good news here!

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