Behind Bank of America's Big Gamble

The endgame in Bank of America Corp.'s $4 billion takeover of Countrywide Financial Corp. began with a December phone call from Countrywide Chief Executive Angelo Mozilo to his Bank of America counterpart, Kenneth D. Lewis.

After more than six months of financial deterioration at Countrywide -- despite a $2 billion infusion of cash from Bank of America in August -- Mr. Mozilo said he was ready to throw in the towel, according to Mr. Lewis.

At the same time, having watched Countrywide dramatically retool its operations in a bid to survive, Bank of America executives began to believe Countrywide's big ...