The world is swimming in ideas on how to ease the pain of the housing bust. The Senate is considering a $15 billion relief package that would fund purchases of foreclosed properties and help borrowers refinance troubled mortgages. Consumer advocates want to allow judges to reduce residential mortgage debts, a measure congressional Republicans have opposed.

But while those ideas get tossed about in Washington, Mark Gimein offers up an idea at slate.com that lets consumers take immediate action to ease the glut of unwanted houses: You can buy a foreclosed property direct from Countrywide (CFC).

Buying from Angelo Mozilo’s crew may not be your first choice. You may think Countrywide has gotten enough help already, what with its massive executive payouts and its agreement to sell itself of Bank of America (BAC). You may have noted with some alarm that the Justice Department is now probing the company’s lending practices.

Indeed, you may wonder about the possible conflicts of interest involved in a purchase from Countrywide’s real estate portfolio. Gimein notes that the company demands that forclosed-house buyers who don’t pay in cash must prequalify for a mortgage with a Countrywide loan office just to make a bid, whether or not they take the loan.

But, Gimein points out, taking a loan from Countrywide means getting a free appraisal, too - which makes for a very attractive proposition, at least for the company. “Take that offer and that means you’ll be buying a house from Countrywide, financed by Countrywide, on the basis of an appraisal from Countrywide,” he writes. “You can file that under Department of Foxes and Henhouses.”

Bank of America (BAC) really wants to hang onto Countrywide’s (CFC) No. 2 executive. BofA will pay Countrywide president David Sambol $28 million in cash and stock if he sticks around for three years as the combined company’s head of mortgage operations, according to a Securities and Exchange Commission filing Thursday. Bank of America said in January when it agreed to buy Countrywide for $4 billion in stock that it aimed to position itself for a leading role in the U.S. mortgage industry when the housing downturn bottoms out.

Reuters notes that Sambol’s sweet payday compares favorably with the one taken last year by Ken Lewis, Bank of America’s CEO, who made a paltry $20 million in 2007. That’s a turnabout from Sambol’s situation at Countrywide, where he was working for Angelo Mozilo, whose massive stock-sale gains over recent years recently got him hauled before a congressional panel investigating CEO pay. In his testimony earlier this month, Mozilo called reports of his pay package “grossly exaggerated.” Some would say the same of the pay itself.

Investors are piling onto the bet that the Countrywide (CFC)-Bank of America (BAC) deal will crack. Countrywide plunged 14% in trading Monday to a 13-year low on reports the FBI is probing whether the mortgage lender misrepresented its condition in financial filings. The selloff means that Countrywide shares are trading at a 32% discount to the value they would fetch should Bank of America complete its acquisition of Countrywide at the agreed-upon terms. The spread was just 9% two weeks ago, before the latest round of credit market stress sent financial stocks tumbling.

The selloff means more bad news for investors in Countrywide, which has lost almost 90% of its value over the past year amid a sharp downturn in the housing market. One Countrywide shareholder who may be particularly nonplussed is value investor Bill Miller, who recently pushed his stake in the company to almost 15% on the argument that the Bank of America deal undervalues Countrywide. With Countrywide shares fetching just $4.36 each - a discount of more than $2 a share to the indicated value of the merger - he’s going to have a hard time making that argument stick.

The unrest in the credit markets is intensifying worries about Countrywide (CFC). Shares of the mortgage company dropped 9% in Thursday’s marketwide selloff, amid fears that steep declines in mortgage-related securities will lead to more losses at big lenders. Particularly hard hit Thursday were mortgage companies such as Countrywide, Fannie Mae (FNM) and Freddie Mac (FRE), along with mortgage real estate investment trusts like Annaly (NLY). Less affected were big banks such as Bank of America (BAC), which agreed in January to buy Countrywide in an all-stock deal then valued at $4 billion.

As a result, Countrywide shares now trade at a 22% discount to their value as implied in the merger agreement. That spread is up from just 9% last Wednesday - suggesting investors are increasingly concerned the deal won’t get done - even though Bank of America said this week the combination is on track to close in the third quarter.

Meanwhile, Countrywide chief Angelo Mozilo is due to appear Friday morning before the House Committee on Oversight and Government Reform, which is holding a hearing on CEO pay. Mozilo will surely focus on his success in building Countrywide from scratch over 39 years, and his decision earlier this year to relinquish some change-of-control pay tied to the merger. But Democrats on the committee will no doubt be asking how Mozilo can justify taking home millions of dollars in stock-sale gains over the past decade while Countrywide and the rest of the industry careened toward a damaging housing bust. Don’t hold your breath waiting for an answer.

One bright spot in Tuesday’s stock-market swoon was Thornburg Mortgage Associates (TMA), the jumbo mortgage lender that like a number of other housing-finance firms endured a brush with insolvency when the mortgage securities market collapsed this past summer. Unlike rival Countrywide (CFC) - which promised a return to profit but posted a big loss instead - Thornburg returned to profitability in its fourth quarter, after reporting a billion-dollar third-quarter loss following a fire sale of part of its mortgage portfolio. Thornburg made $65 million, or 34 cents a share, down from the year-ago $80 million, or 68 cents a share.

 The company also said it could be a beneficiary of the push to boost the size of loans eligible for purchase by government-sponsored investors Fannie Mae (FNM) and Freddie Mac (FRE). Measures being considered in Congress would raise the so-called conforming loan limit to $625,000 or more from the current $417,000 - a move that could allow Thornburg to sell loans that until recently have had no buyers.

“With the potential for expanded agency guidelines raising the conforming loan limit, the company would expect to benefit from this market change as a notable percentage of its pipeline and existing unsecuritized loan portfolio would qualify under the increased loan limit,” Thornburg said Tuesday. “The company would then be able to create agency securities as well as the private label securities in order to further diversify its portfolio financing strategies.” Thornburg’s experience over the past year shows why investment advisers are always advocating a more diversified portfolio.

Not everyone is overjoyed with Bank of America’s (BAC) deal to buy Countrywide (CFC). Hedge fund SRM, which has taken a 5.2% stake in Countrywide, said in a regulatory filing Thursday that it is “of the view that the merger agreement does not provide sufficient value to holders” of Countrywide shares. The news comes as shares in Countrywide, which have dropped 86% over the last year amid a steep decline in the housing market, continue to trade sharply below the indicated value of the merger. Even so, there’s a substantial body of thought to the effect that if Bank of America hadn’t come to Countrywide’s rescue three weeks ago, Countrywide shareholders would now find themselves holding stock that is essentially worthless, given the company’s repeated brushes with bankruptcy. SRM, which has been buying and selling shares over the past two months at prices between $5.20 and  $9.12 a share, obviously doesn’t subscribe to that view. It says in the filing that it “may initiate discussions with [Countrywide] and may communicate with the [Countrywide's] executive management and board of directors, with other holders of the issuer’s common stock, and with B of A from time to time regarding the proposed terms of the merger agreement.” Good luck with that.

Countrywide (CFC) rose early Tuesday after the mortgage lender swung to a fourth-quarter loss. Countrywide lost $422 million, or 79 cents a share, for the quarter ended Dec. 31,  reversing the year-ago profit of $622 million, or $1.01 a share. The company’s mortgage banking unit swung to a $623 million pretax loss, as loan funding dropped 48% from a year ago, and the banking operations posted a pretax loss of $279 million. “While considerably improved from the previous quarter,” CEO Angelo Mozilo said, “Countrywide’s results for the fourth quarter of 2007 were adversely impacted by further credit deterioration across the industry and continued illiquidity in the secondary mortgage markets.” The results made a mockery of Mozilo’s claim back in October, when he unveiled a $1.2 billion loss for the third quarter, that the company had “laid the foundation for a return to profitability in the fourth quarter.” No matter, though. Countrywide shares rallied as the report showed the company is still in business - which should be enough to keep suitor Bank of America (BAC) happy for now.

Countrywide (CFC) chief Angelo Mozilo is giving something back. The embattled executive said early Monday he will waive his right to $37.5 million in payments tied to the agreement Countrywide signed this month to sell itself for $4 billion to Bank of America (BAC). The decision comes after Democratic politicians ranging from U.S. Sen. Hillary Clinton to U.S. Rep. Barney Frank criticized Mozilo’s lush pay package, given the distress being felt by many homeowners amid a surge in mortgage defaults. Mozilo has reaped hundreds of millions of dollars in recent years by selling Countrywide shares - a fact that began to rankle over the past year, as Countrywide shares lost more than 80 percent of their value and the company endured two brushes with bankruptcy amid worries about possible losses in its loan portfolio.

Beyond showing that he’s not just in it for the money, Mozilo has a bone to pick with the press. He stressed in Monday’s press release that media estimates of his severance package have been overstated. Under the merger agreement, Countrywide says, “Mr. Mozilo would be entitled to $36.4 million in cash severance pay and $400,000 per year in consulting fees, as well as private airplane use and other perquisites. These are the amounts and benefits he will be forfeiting.” Well, it’s a start.

Bank of America (BAC) took a big hit in the fourth quarter. The nation’s largest consumer bank posted a 95 percent plunge in quarterly earnings, to $268 million, or a nickel a share, from a year ago as BofA added $1.33 billion to its reserves for credit losses. The bank posted a $5.44 billion loss to its trading account, as BofA took writedowns on its holdings of collateralized debt obligations, reversing the year-ago trading profit of $460 million. Bank of America also took a $400 million loss to support some of its Columbia Management cash funds that had invested in debt that subsequently defaulted or was downgraded.

“Our fourth quarter results were severely impacted by ongoing dislocations in capital markets and the slowing economy,” said CEO Kenneth D. Lewis. “Even given that environment, we certainly are not pleased with our performance. However, we are cautiously optimistic about 2008, though we believe economic growth will be anemic at best in the first half.”

Not everyone is optimistic about what’s going on at Bank of America. At Naked Capitalism, Yves Smith writes that it appears Bank of America may not stand behind the debt issued by Countrywide (CFC) - a move that could leave Countrywide debtholders with big losses once the Bank of America-Countrywide deal closes later this year. Investors in Countrywide probably feel they are all too familiar with losses as it is.

It’s open season on Countrywide (CFC) chief Angelo Mozilo. U.S. Sen. Hillary Clinton became the latest political leader to criticize the riches Mozilo has accumulated in recent years while leading his mortgage company to the brink of collapse. Bank of America (BAC) last week agreed to pay $4 billion in stock to buy Countrywide, just days after the company was forced to deny bankruptcy rumors for the second time in less than a year. The deal allows BofA to buy Countrywide near its 52-week low, locking in losses for many shareholders - while handing Mozilo a severance package valued in the tens of millions of dollars. Some observers see Mozilo’s massive paychecks as a troubling case of perverse incentives.

Clinton called Mozilo’s pay package “outrageous” and told CNBC that the deeply tanned executive is “one of the principal architects of this whole house of cards, with these exotic subprime mortgage vehicles,” Reuters reports. Others in Congress have already taken aim at Mozilo: U.S. Rep. Henry Waxman invited him to testify about his pay next month, and U.S. Sen. Charles Schumer and U.S. Rep. Barney Frank have urged him to give some of his massive severance package to families that could lose their homes. Don’t hold your breath. For its part, Countrywide is trying to change the subject, claiming in a recent press release that its recently redoubled loan modification and related efforts “helped more than 80,000 borrowers retain their homes in 2007.” Too bad Mozilo and his minions didn’t care about home retention until it was too late for thousands of others.