Will Bank of America Abandon Countrywide?

Do we wake up tomorrow and discover that Bank of America (BAC - commentary - Cramer's Take) walks away from the Countrywide Financial (CFC - commentary - Cramer's Take) deal because of the FBI investigation? I have been thinking for some time that there must be a war at the highest level of Bank of America between those who say, "We are risking the franchise by buying this company," and those who say, "Look we have to do it, we have to have a gigantic percentage, a predominant percentage of the mortgage origination business. It's a once in a lifetime chance."

Until things really broke down a few weeks ago and even Fannie Mae (FNM - commentary - Cramer's Take) and Freddie Mac (FRE - commentary - Cramer's Take) paper started coming under assault, I thought this deal was an intriguing idea, although one I would never do because risking the franchise is always unthinkable.

Now, however, we are in a moment where pretty much everything is going wrong and the dreams of the "early cycle" period seem like history.

So, now we have to believe that the FBI is just a great excuse to abandon the bid.

Think about it. When this bid occurred things weren't looking as bad as they are now. I thought that Bank of America should have taken the multibillion-dollar hit on Countrywide and moved on. But some might have thought that the Fed was going to do more than just cut rates, that maybe it would buy triple-A-rated paper and urge the Treasury to push the Federal Housing Administration into refinancing homeowner debt. And, maybe Bank of America didn't see the employment decline and the recession.

Whatever.

It is worth thinking about the decline and fall of Countrywide Financial right now, because is there a soul reading this who believes that Countrywide Financial would still be in business if Bank of America hadn't made the bid?

Yeah, I figured as much.

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

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