Bank of America (NYSE:BAC) is treading in rough waters these days ever since it sunk $2 billion into the struggling mortgage company Countrywide. That stake has since halved in value as Countrywide shares continued to decline during the past few months. This has led to speculation that BAC will be pressured into throwing more money onto the fire or perhaps even purchasing the mortgage company outright.

A recent Wall Street Journal article pointed out that "people familiar with the thinking in its executrive suite say the company is in a wait-and-see mode". This unearthed speculation that the company could acquire the troubled mortgage banking firm once it hits a bottom to create the world's largest mortgage bank. Bank of America already has the right of first refusal if another company makes an offer for Countrywide, but many believe that it may not wait.

So, what does this mean for shareholders? Well, the mortgage banking firm probably will not sell for much more than its current $5 billion market cap given all of the troubles that it is facing. Moreover, any potential deal might be questioned by antitrust officials concerned that the company will have a monopoly on the vulnerable market. The real value of such an announcement would be the idea of a bottom in the subprime mortgage crisis. Combined, these factors make BAC a stock worth watching!

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