Mortgages remain a thorn in BoA’s side

TRD New York /
Oct.October 17, 2012 03:30 PM

Year-over-year, Bank of America posted an 18 percent increase in mortgage originations to $21 billion, the AP reported. However, the bank’s mortgage unit still lost money by working through mortgages issued before the onset of the housing crisis.

Refinancing accounted for the bulk of mortgage growth in the third quarter — 83 percent for the bank. As The Real Deal reported today, mortgage applications in general decreased 4.2 percent during the week of Oct. 12.

Even five years after the housing crisis began, mortgages are still troublesome for the banking industry, as banks get slammed with pricey reminders of risky mortgage lending with foreclosures and lawsuits.

All in all, the bank posted a profit of $340 million in the third quarter — less than a penny per share, but better than the 11-cent Loss Wall Street had expected. But with this figure came a $1.6 billion charge for legal expenses after settling a shareholder lawsuit, which alleged the bank misled investors about its 2008 decision to acquire Merrill Lynch, the third quarter results are skewed, the AP said. Also, a near $2 billion charge from an accounting rule on how banks value debt hurt Bank of America.

Expressing caution and some ambiguity over whether the housing market has turned “I don’t think we’ve clearly begun to turn the corner,” Bank of America CFO Bruce Thompson told the AP. [AP via Crain’s]


Related Articles

arrow_forward_ios
Dan GIlbert (Getty, iStock)

Mortgage mogul Dan Gilbert sees net worth quicken to $34B

Mortgage mogul Dan Gilbert sees net worth quicken to $34B
The rate on the 30-year mortgage fell to 2.88 percent, the lowest rate in 50 years (iStock)

30-year mortgage rate hits record low — again

30-year mortgage rate hits record low — again
The weekly survey tracking purchase loans saw a seasonally adjusted decline of 2 percent in the final week of July. (iStock)

Home loan applications fall again amid tight credit rules, weak job market

Home loan applications fall again amid tight credit rules, weak job market
Cash-strapped mortgage borrowers are paying off credit cards and other consumer debt instead because those bills are lower (iStock)

TRD Insights: More homeowners are skipping mortgage payments in favor of credit card bills

TRD Insights: More homeowners are skipping mortgage payments in favor of credit card bills
(iStock)

TRD Insights: Homebuyers in Black communities charged higher mortgage rates, report finds

TRD Insights: Homebuyers in Black communities charged higher mortgage rates, report finds
Dan Gilbert (Getty, iStock)

Parent of Quicken Loans, Rocket Mortgage seeks $3.3B in IPO

Parent of Quicken Loans, Rocket Mortgage seeks $3.3B in IPO
Fears over a second wave of coronavirus infections and the wait-and-see for the next round of government relief has led U.S. homebuyers to hit pause. (iStock)

Mortgage applications fall as fears of second wave rise

Mortgage applications fall as fears of second wave rise
Acting US Attorney for Eastern District of New York Seth DuCharme and Bank of America CEO Brian Moynihan (Getty, Twitter, iStock)

Bank of America will pay $300K to settle DOJ mortgage lending discrimination claim

Bank of America will pay $300K to settle DOJ mortgage lending discrimination claim
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...