Despite allegations that the FBI is investigating Countrywide for possible home mortgage fraud, the Bank of America is planning to go ahead with their bid to buy the floundering company. “Nothing I’ve seen suggests that Bank of America is backing off,” says Tom Atteberry, a partner at Los Angeles- based First Pacific Advisors LLC, which oversees $2 billion. “It’s in everyone’s best interest that Countrywide avoid bankruptcy and it’s hard to believe that there isn’t some kind of agreement to help Bank of America avoid some of these legal problems.”
Countrywide stock has fallen more the 31% since the Bank of America announced their intention to buy the company. The subprime housing crisis has since reached a peak, but apparently, this isn’t bothering the Bank of America. Some analysts are concerned that the company is getting into a big mess, particularly with the FBI investigation on Countrywide’s home mortgage lending practices. However, some paint a much rosier picture. “It’s not uncommon for the FBI to investigate matters that have created such controversy,” said Gary Townsend, co-founder of Chevy Chase, Maryland-based money management firm Hill- Townsend Capital. “This is just one more thing for Bank of America to watch as they move forward on this deal.”
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