Late Wednesday Bank of America invested $2 billion in Countrywide Financial Corp., the nation's largest home lender, a possible sign that the mortgage liquidity crisis could be ebbing somewhat -- but only for conventional lenders. (See Angelo Mozilo's confidential memo to employees.)The news came just after Lehman Brothers closed its subprime unit, BNC Mortgage, and Quality Home Loans, the nation's largest "hard money" lender filed for bankruptcy protection. In a memo sent to employees CFC chairman, co-founder and CEO Angelo Mozilo said, "Through this important investment from Bank of America, today, Countrywide's future is much brighter." A little over a week ago, CFC's future was in doubt after a Merrill Lynch analyst, Kenneth Bruce, suggested that if the industry's liquidity crisis continued the lender might be forced into bankruptcy. Specifically, BoA invested $2 billion in the form of a non-voting convertible preferred security yielding 7.25% annually. The security can be converted into common stock at $18 per share, with resulting shares subject to restrictions on trading for 18 months after conversion.

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