One ugly chapter in Countrywide Financial's story has finally ended.

Bank of America agreed to buy the troubled lender for $4 billion in stock, just five months after it pumped $2 billion into the company to help it stay in business.

The bank will pay approximately $7.16 per share for Countrywide, which is lower than yesterday's closing price of $7.75—and well below the $18 per share that Bank of America's convertible shares were priced in its earlier deal.

In premarket trading, Countrywide shares fell as low as $6.75. Bank of America shares only slipped slightly.

Bank of America chief executive officer Ken Lewis tried to paint a positive picture of the situation, but he did acknowledge that the acquisition comes with its challenges. "We are aware of the issues within the housing and mortgage industries," he said in a statement. "The transaction reflects those challenges. Mortgages will continue to be an important relationship product, and we now will have an opportunity to better serve our customers and to enhance future profitability."

Countrywide, which is the nation's largest mortgage provider, has been hammered by the subprime crisis and the tight credit market. Founded by Angelo Mozilo, Countrywide was among the most aggressive sellers of risky home loans, a practice that eventually backfired. Earlier this week, the company fended off rumors that it was near bankruptcy. Its stock has fallen 80 percent since last year.

Despite its troubles, Countrywide still has value, and Bank of America's purchase is a far better outcome than bankruptcy. Antony Currie at BreakingViews points out that even during the painful fourth quarter, Countrywide managed to originate $69 billion worth of mortgages. And its mortgage-servicing arm can offset some of the losses from the lending side.

Felix Salmon says on his Market Movers blog that Bank of America became the most important player in the mortgage business overnight, and Ken Lewis has coveted the lender for years. Bank of America acquires 9 million borrowers with the deal.

This deal could end up looking like a steal for Bank of America. In the meantime, however, there is a lot of cleaning up to do.

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