NEW YORK, Aug 12 (Reuters) – Bank of America Corp has considered putting its Countrywide mortgage assets into bankruptcy to staunch the bleeding from the loans, but such a move would face so many obstacles that it is unlikely to happen.
Brian Moynihan, the bank’s chief executive, is looking for ways to stabilize Bank of America’s falling stock price as worries grow that Countrywide has become a bottomless money pit — especially after Monday’s $10 billion lawsuit filed by American International Group Inc.
In a call with investors on Wednesday, Bruce Berkowitz, a major Bank of America investor, asked Moynihan about the possibility of its Countrywide unit filing for bankruptcy.
“We thought of every possible thing we could,” Moynihan replied. “The path we’ve taken is the best judgment for shareholders and this company.”
While the CEO seemed to be saying the bank is not planning to put Countrywide into bankruptcy, Berkowitz’s question raised a possibility that some investors had not thought of. The company’s shares rose off their intra-day lows after the exchange, and at least three investors who spoke to Reuters after the call cited the question about a Countrywide bankruptcy as a reason.
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