Earlier this year, Bank of America Corp. chief executive Ken Lewis was asked about the idea of buying a standalone mortgage lender. "We like the product, but we don’t like the business," he said then.

The feeling in Charlotte could be changing.

Bank of America invested $2 billion in Countrywide Financial Corp. late Wednesday in a deal gives the Calabasas, Calif.-based company the quick cash infusion it needs to stabilize a balance sheet rocked by tightening credit markets and rising mortgage defaults.

But it also comes with an option that gives the nation’s second-largest bank the opportunity to become Countrywide’s largest shareholder, as well as the right to match any takeover offer from another suitor. It’s also a sign the bank’s strategy of expanding its mortgage business remains unchanged, despite the ongoing struggles in the nation’s home-loan market.

"We view Bank of America’s investment as a rent with the option to own Countrywide," CreditSights analyst David Hendler wrote in a research note on Thursday.

In January, Lewis dismissed a report in the Financial Times that he was in talks with Countrywide, the nation’s largest mortgage lender, about forging an alliance. Bank of America wanted to sell more mortgages, he said, but didn’t like the business model of the mortgage industry.

Today, it’s easy to see why. Countrywide is among the dozens of mortgage lenders that have battled a spike in mortgage defaults and foreclosures, especially in subprime loans—those made to borrowers with weak credit. On Monday, Countrywide said it had eliminated about 500 jobs in its subprime lending unit and a division that makes loans to customers with minor credit problems.

The problems haven’t extended to Bank of America, which exited the subprime lending market in 2001 when Lewis took over as chief executive, calling it a business that had "become unattractive from a risk-reward standpoint."

"Our primary worry about the subprime market was that we didn’t like the lack of control and reputation risk," said bank spokesman Robert Stickler. "There’s not a reputation risk (now) since it’s being done by Countrywide."

Lewis has pushed the bank to improve its market share of prime mortgages, or those offered to borrowers with a solid credit history, and industry experts believe it’s a market the bank has yet to fully tap. Bank of America already holds a residential mortgage portfolio of $260 billion and has a stated aim of doubling its current 5 percent share of the direct-to-consumer mortgages in the next three years.

The nation’s largest retail bank, with 5,700 branches, rolled out a national "no-fee" mortgage program in May that does away with the collection of borrower, lender and third-party fees that typically add a few thousand dollars to the price of buying a home. Earlier this month, Bank of America offered to pay off the mortgages—up to $300,000 — of police officers, as well as firefighters, teachers and medical workers, who have a mortgage with the bank and suffer an accidental death, paralysis or serious injury.

The deal with Countrywide allows Bank of America to covert its $2 billion equity stake into common shares for $18 per share. Doing so would give Bank of America between 16 percent to 17 percent of Countrywide’s outstanding shares, Stickler said, and make it the company’s largest shareholder.

Bank of America also has the right to match any offer for the company, should Countrywide receive a buyout offer from a third party. But doing so could also be difficult, since it would likely place Bank of America over the federal cap limiting any American bank from holding more than 10 percent of the nation’s total bank deposits.

"We are not the owners of Countrywide. We’re simply making an investment," Sticker said.

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