Market Share of the New Countrywide/Bank of America

Since Bank of America purchased Countrywide last week, it has now become the major player in mortgage loans for America. This graph (from The Wall Street Journal online) shows that the Bank of America and Countrywide now represent one quarter of all loans originated in the country! What this means is twofold. First, the good news. By saving Countrywide from bankruptcy, it solidifies the real estate market and keeps things from getting much worse. Some think that if Countrywide had gone bankrupt, it would have severely halted the entire mortgage business from Wall Street to Main Street. The bad news for consumers is that because Bank of America now essentially owns a quarter of the mortgage business in America, I believe the result will be higher costs and interest rates for borrowers since there naturally will be less competition — at least for the next year. Once the market shakes out, there will once again be new mortgage companies and programs that will compete with the large players. This has always been the case.

This entry was posted on Tuesday, January 15th, 2008 at 5:20 pm and is filed under Financing, Miscellaneous. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.