Bank of America is in talks to take over Countrywide in an all stock transaction. The announcement could come as early as today.

This will be interesting to watch because although Bank of America infused over $2 Billion dollars into Countrywide in the summer of 2007 in the form of loans, they are not Countrywide’s primary funds source, Citibank was.

UPDATE: The merger has been announced. It is all stock meaning BofA will exchange shares of its stock for Countrywide stock. The number of shares of BofA each Countrywide shareholder receives is based on a Countrywide share price of $7.16. This values the whole deal at about $4 Billion in stock.

Is this good news for anyone? Well, it is very good news for BofA shareholders because they are getting the most recognized and marketed consumer mortgage lender in the country at a discount! The Countrywide brand is a significant part of what BofA is buying.