The deal that cost Bank of America $50 billion – and counting

The Charlotte Observer reports:

Bank of America’s mortgage business has lost more than $50 billion since the Charlotte bank bought Countrywide Financial for $2.5 billion, according to an Observer tally, and more losses are coming in an expected Justice Department settlement.

After announcing the deal for the ailing subprime lender in January 2008, then-Bank of America chief executive Ken Lewis called it a rare chance to become No. 1 in home loans. Instead the bank’s shareholders have spent six-plus years paying for Countrywide’s slipshod lending practices.

The disastrous purchase not only harmed investors but also employees, homeowners and the Bank of America headquarter’s city, which had risen to national prominence as its banks spread across the country in the 1980s and 1990s.

“It was a crippling deal for Bank of America,” said Ken Thomas, a Miami-based banking consultant, “and Bank of America is still in recovery mode because of it.”

An article worth your time.