BofA to Buy Countrywide

"Seems like [BofA's] throwing good money after bad," said Peter Cohan, president of consulting firm Peter Cohan & Associates on Thursday. "They're doubling down on a bad bet." The question is, Cohan continues, "are they buying more liabilities on a net basis or are they buying something that actually has some value?"

But for BofA, an acquisition should hardly be viewed as obligation, or, for that matter, an act of charity as the bank serves as savior to the U.S.'s mortgage market. The crown jewel of Countrywide's business, at this stage in the subprime-infused collapse in mortgages, is its servicing portfolio -- a very steady revenue business that has been coveted by distressed investors including Wilbur Ross.

BofA is getting a lender at a deep discount and, in the process, purchasing a platform that could prove invaluable over a five- to 10-year period.