Industry News

BofA says Countrywide deal on track

Troubled lender reports $704 million 2007 loss

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Bank of America Corp. says it's moving forward with its $4 billion acquisition of Countrywide Financial Corp. even as the troubled lender reported a $422 million fourth-quarter loss. Countrywide's losses for the year totaled $704 million, thanks to an even more tumultuous third quarter, when the seizure of credit markets in August contributed to a $1.2 billion loss for the Calabasas, Calif.-based lender. Disruption of capital markets and "a severe lack of liquidity" for loans not eligible for purchase by Fannie Mae and Freddie Mac forced Countrywide to move $7 billion in loans it had hoped to securitize and sell to investors onto its own books during the fourth quarter, writing down their value by $394 million, the company said in a press release today. Countrywide also revealed that it was forced to boost reserves for credit losses to $1.9 billion at the end of the year, compared with $1.2 billion at the end of the third quarter and $269 million at the end of 2006. In...