Spotlight

Bank of America CEO Kenneth Lewis is gambling “that the U.S. is nearing a housing bottom,” said Valerie Bauerlein and James R. Hagerty in The Wall Street Journal. It’s a big gamble. BofA agreed last week to pay $4 billion in stock for Countrywide Financial, the largest U.S. mortgage lender. Not only is the housing market in turmoil, of course, but Countrywide also faces lawsuits over alleged deceptive lending practices and a federal investigation into stock sales by Countrywide Chairman Angelo Mozilo. Lewis says he took those negatives into account before deciding to acquire the lender. “We weighed the short-term pain,” he says, “versus what we think will be a very good deal for shareholders.” Lewis says he sees mortgages as a key product “for deepening relations with customers.” And he says he admires Countrywide’s skill at running a high-volume lending business. “The people who operated the business on a day-to-day basis” played no role in top management’s questionable decisions, he said. “They are very, very good at what they do.”