In the wake of Friday’s announcement by Bank of America Corp. (BAC) that it likely would not take on any of Countrywide Financial Corp.’s (CFC) outstanding debt, analysts are buzzing that BofA is now likely to renegotiate its deal to purchase the troubled lender — or that the banking giant could walk away altogether. That’s the conclusion of Friedman, Billings, Ramsey analyst Paul Miller, who said in a note to clients this week that the banking giant would likely renegotiate the purchase price to between $0 and $2 per share in the wake of mounting losses at the Calabasas-based lender. Via Reuters, who first reported on the story, Miller concluded that Countrywide’s loan portfolio has deteriorated so rapidly that it currently has negative equity. He called BofA’s announcement on Countrywide’s debt “most likely the first step in renegotiating the entire deal.” On Friday, Standard & Poor’s said it had cut Countrywide’s core credit rating to junk, citing “the new level of uncertainty as to the ultimate legal status of Countrywide’s creditors after the merger.” BofA said in its statement that it may not support as much as $24 billion of the lender’s debt once the merger is completed. Miller suggested that markdowns on Countrywide’s loan portfolio may grow larger than Bank of America had planned for when it originally penned a $4 billion deal to purchase the lender in January. “We believe Countrywide has significant credit risk on its balance sheet, not only in its loan portfolio, but in its subprime and HELOC securities and residuals, its representations and warranties on loans sold, and in loans held outside of banking operations,” Miller is quoted by Reuters as saying. Countrywide held $28 billion of option ARMs, $14 billion in HELOCs, $20 billion in second liens, and $19 billion of hybrid ARMs at the end of the first quarter. Disclosure: The author was long CFC and held no other relevant positions when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.