Investment guru Warren Buffett could be interested in buying parts of the troubled mortgage lender, which has suffered immensely in the market's recent turmoil, The Wall Street Journal is reporting.
Countrywide, which was trading at $40.56 three months ago, has since lost 51% of its value as delinquencies and foreclosures have risen and credit has tightened. At midday, shares were up $1.88, or 9.5%, to $21.69.
Buffett, whose Berkshire Hathaway (BKA.A, news, msgs) is invested in financial firms with strong brands like Wells Fargo (WFC, news, msgs) and Bank of America (BAC, news, msgs), might like both Countrywide's price and its portfolio of "high-quality mortgages and mortgage-backed securities," the paper noted.
This wouldn't be the first time Buffett has stepped in as white knight. In 1991, Buffett helped the investment bank Salomon Bros. weather a criminal investigation by stepping in as chief executive officer, the paper wrote, and then Buffett was close to leading the bailout of the hedge fund Long-Term Capital Management in 1998.
The recent market volatility and mortgage crisis has been likened to the demise of Long-Term Capital Management, which suffered massive losses amid a flight to liquidity and was bailed out by a number of Wall Street banks.
Information found on msn.com