BofA Agrees to Buy Countrywide

Bank of America Corp. has agreed to buy the troubled mortgage lender Countrywide Financial Corp. for $4 billion in stocks. The deal will reportedly stave off threats of bankruptcy for the massive mortgage lender. The transaction will be finalized in the third quarter. Bank of America expects to see $670 million in cost savings that will be fully realized in 2011. The company will not originate the controversial subprime loans. Countrywide was forced to draw on an $11.5 billion line of credit on Aug. 16 to bolster its liquidity. The troubled lender reported a $1.2 billion third-quarter loss.