Imagine that. Countrywide didn’t just sell itself to Bank Of America to avoid certain bankruptcy, they did so to try and escape the wrath of government regulators who smelled a rat.

Countrywide Financial Corp’s (CFC.N) decision to sell itself to Bank of America Corp (BAC.N) was driven in part by fear of potential crackdowns by regulators, the Wall Street Journal reported on its Web site on Monday.

The largest U.S. mortgage lender had been convulsed by mounting losses and a lack of access to capital. But a more pressing danger was increased pressure from regulators, politicians and credit-rating firms, the paper said.

Regulators and politicians were not the only ones who smelled a rat. I bet a majority of the people who held Countrywide mortgages new something was up and were just waiting for the ball to drop. You have to know that your customers are on to you when you start refusing to accept certified letters that are being sent to you.

It sounds like there was more to the story as well.

Rapid growth in consumer bank deposits at Countrywide meanwhile raised the potential of greater scrutiny from the Federal Deposit Insurance Corp. Countrywide also was dealing with a series of investigations by state attorneys general and the Securities and Exchange Commission.

Wow. The lending and their banking divisions were under scrutiny. No wonder they ran so fast to BofA.

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