Countrywide's Garbage Could Drag Down BAC

Today on "Wall Street Confidential," I said the unthinkable -- I suggested that Bank of America (BAC - commentary - Cramer's Take) could be wiped out by Countrywide Financial (CFC - commentary - Cramer's Take). What triggered that Cassandra view is something I found in The Mortgage Lender Implode-O-Meter issued by Countrywide today: "Effective today, Countrywide wholesale will no longer offer the Non-conforming Fast & Easy document waiver program. Fast & Easy is Countrywide's version of stated income. Non-conforming loan amounts will no longer be eligible for stated income, regardless of credit scores."

To which I say, you have to be kidding me! They were still issuing mortgages based on this nonsense? They just discontinued it now? Can you imagine the junk they've been pumping out since the peak? Can you imagine how bad things must really be there?

I am telling you that after I see the Downey (DSL - commentary - Cramer's Take) spike -- endless -- the difficulties at Wachovia (WB - commentary - Cramer's Take) in California and the run on the stock of Washington Mutual (WM - commentary - Cramer's Take) I have to ask what the heck BAC was thinking when it bought this company. How could they?

Ken Lewis has been bemoaning that he got into investment banking, into stock research, into stock loan. Those are all good, stable businesses. This kind of business of "fast and easy document waiver" is so outrageously bad that I cringe just thinking about that portfolio.

What a nightmare. I just don't know what to say about BAC. It's going to be a bad stake for a very long time.

At the time of publication, Cramer had no positions in the stocks mentioned.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.