States file lawsuits against Countrywide

Shareholders approve company's takeover by Bank of America

The timing of the lawsuits in California and Illinois as Countrywide prepared to close the books after nearly 40 years underscored the company’s dramatic shift over the past 12 months as the mortgage and housing markets soured, inducing its slide from the nation’s largest originator and servicer of home loans to easy pickings for a takeover.

Less than an hour into the special stockholders meeting at Countrywide’s headquarters in Calabasas, Calif., the company announced that 69 percent of outstanding shares were voted in favor of the deal, which is expected to close July 1.

The outcome was widely expected, even though the deal was second-guessed throughout and plagued by doubts that Charlotte, N.C.-based Bank of America would pull out or look to renegotiate the original terms — an all-stock deal valued at about $4 billion.

The acquisition is expected to give Bank of America control of 20 percent to 25 percent of the home loan market, something the company hopes will pay off handsomely once the housing market recovers.

Some analysts suggest the banking giant may also benefit another way — using tax write-offs to help offset the cost of the acquisition.

But along with Countrywide’s more favorable assets, Bank of America will also have to take on the trove of lawsuits related to Countrywide’s lending practices, among other headaches.