BofA Needs to Rework Countrywide Deal

Consensus is building among analysts that Bank of America(BAC Quote) will have to lower its offer price for troubled mortgage lender Countrywide Financial(CFC Quote) or pull out of the pending deal altogether.

Countrywide shares have taken a beating this week, after Friedman, Billings, Ramsey analyst Paul Miller on Monday wrote that BofA should "walk away" or at least renegotiate the $4.1 billion deal after Standard & Poor's downgraded the lender's debt to junk.

BofA itself already indicated last week that it was mulling its options about taking on some of Countrywide's debt -- which Miller suggested could be a "first step in renegotiating the entire deal." And while the bank publicly remains committed to closing the deal by the third quarter, a growing chorus of analysts is beginning to wonder how that can happen under the existing conditions. ...