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It's Official. Bank of America is Buying Countrywide
POSTED
ON BY Ken Tumin
Bank of America just recently announced this news, and coincidentally, Countrywide Bank's CD rates just had a large decline. According to Bank of America's press release:
I don't know what the short term implications are to Countrywide Bank depositors. In the press release it states that "Bank of America plans to operate Countrywide separately under the Countrywide brand with integration occurring no sooner than 2009." Also it states that the purchase is expected to close in the third quarter. CNN has more on this news story.
Since the purchase isn't expected to close until the third quarter, it seems unlikely that Countrywide Bank cusomters will see too many changes in the short term. This should help ease concerns of depositors of having their money in a bank that is on the verge of going under. So Countrywide may not feel the need to keep rates as high as they have.
The latest rate change was likely unrelated to the current news. I found this quote in this yesterday's LA Times article:
Countrywide's 3 and 6-month CD yields declined today from 5.45% to 5.25% APY.
Bank of America Corporation today announced a definitive agreement to purchase Countrywide Financial Corp. in an all-stock transaction worth approximately $4 billion.
I don't know what the short term implications are to Countrywide Bank depositors. In the press release it states that "Bank of America plans to operate Countrywide separately under the Countrywide brand with integration occurring no sooner than 2009." Also it states that the purchase is expected to close in the third quarter. CNN has more on this news story.
Since the purchase isn't expected to close until the third quarter, it seems unlikely that Countrywide Bank cusomters will see too many changes in the short term. This should help ease concerns of depositors of having their money in a bank that is on the verge of going under. So Countrywide may not feel the need to keep rates as high as they have.
The latest rate change was likely unrelated to the current news. I found this quote in this yesterday's LA Times article:
Pierre Habis, head of retail deposits at Countrywide Bank, said it had continued to attract new deposits this week despite the latest bankruptcy rumors.
The cash inflows have so greatly exceeded expectations, he said, that the bank planned to begin trimming its CD rates in the next week.
If Countrywide lowers CD rates, that could help damp concerns that the company is facing a funding crisis.
Countrywide's 3 and 6-month CD yields declined today from 5.45% to 5.25% APY.
Under current account agreement, you can lock the rate if you fund the account within 10 days. Further, and very importantly, you can ADD ADDITIONAL FUNDS for 30 days and get the orginal rate.
NOTE: These terms may be changing in the near future. Confirm before you execute.
I did get in on one 12 month 5.65% CD for the minimum 10 grand a couple months ago. Maybe it will scoot through to maturity...
just in time..... wow.
Wiser folks may disagree, but I think if you have or buy a CD, the rate and term will be honored.
That having been said, I suspect it's "look out below" for CD rates for the foreseeable future. Lock in anything you can, for as long as you can, at or above 5%. As I always say, anything above 5% is a gift.
Yours,
Bozo
Where have you been?
Scary thought is - There are very reliable sources discerning countrywides talk of bankruptcy due to the government failure to assure failing loans in time.
So says the Notice Of Change In Terms that accompanied the paperwork I received 1-12-08 mailed to me on 1-8-08 from Countrywide on a 6mo 5.45% CD that I initiated on 1-4-08 and funded on 1-7-08.