Analysts worry about Countrywide deal

June 8, 2008 at 1:28 PM

NEW YORK, June 8 (UPI) -- Business analysts say Bank of America's move to acquire debt-laden Countrywide Financial is fraught with land mines and peril for the bank's shareholders.

Countrywide, the nation's largest home lender, has been accused by bankruptcy judges of using dubious tactics to issue mortgages to unqualified borrowers, and has been at the center of the nation's still-unfolding mortgage crisis. But, The New York Times reported Sunday, Bank of America officials are still determined to go ahead with the $4 billion acquisition.

That has brought warnings from financial analysts, who told the newspaper they doubt Bank of America's ability to absorb and deal with all of Countrywide's debt problems.

"It's a lot to ask Bank of America shareholders to stomach," said Mike Larson, a real estate analyst at Weiss Research in Jupiter, Fla.

Meanwhile, Bank of America shareholder David Dreman, chairman of Dreman Value Management, told the newspaper he opposed the deal from the beginning and still does.

"We like Bank of America but I wonder if they went for the franchise much too soon," he said. "It's a deal that we hope won't bite them too badly over time."

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