BofA missing out on huge profits from mortgages

New York /
Dec.December 21, 2012 09:30 AM

Despite the fact that the Federal Reserve is pumping billions into the economy by buying mortgage bonds — making originating mortgages more profitable than ever — certain huge players continue to sit on the sidelines, namely, Bank of America, Bloomberg News reported.

“I get that they got their faces torn off,” Scott Simon, head of the mortgage division at Pacific Investment Management, told Bloomberg News, referring to losses large banks took during the Lehman Brothers debacle. “But this is a different environment.”

Bank of America’s mortgage originations were down 37 percent to $21.3 billion year-over-year in the third quarter of this year, Bloomberg said.

The winners? JPMorgan Chase and Wells Fargo, which have profited handsomely from the giant’s absence in the sector.

“If you’re Wells Fargo you sell six products to the average person who has a mortgage with you,” Simon said. “It’s unbelievable. It’s a money machine.” [Bloomberg News] –Guelda Voien


Related Articles

arrow_forward_ios
A photo illustration of Vishal Garg, chief executive officer, Better.com (Better.com, iStock)
Better.com CEO returns to role after Zoom layoffs controversy
Better.com CEO returns to role after Zoom layoffs controversy
(iStock/Illustration by Steven Dilakian for The Real Deal)
Black mortgage applicants’ rejection disparity surges
Black mortgage applicants’ rejection disparity surges
Milo Founder and CEO Josip Rupena (iStock, Milo Credit)
Crypto-rich but can’t buy a home? Now you can
Crypto-rich but can’t buy a home? Now you can
(Illustration by The Real Deal)
More than 14K LI residents in mortgage delinquency
More than 14K LI residents in mortgage delinquency
(iStock)
Mortgage rates hit 20-month high
Mortgage rates hit 20-month high
Vornado's Steven Roth and Donald Trump with 1290 Sixth Avenue (Getty, VNO)
Vornado, Trump top Manhattan’s largest loans in November
Vornado, Trump top Manhattan’s largest loans in November
Report: U.S. rents surged 7% from October to November
Report: U.S. rents surged 7% from October to November
Report: U.S. rents surged 7% from October to November
Better.com CEO Vishal Garg
Better.com CEO “taking time off” after layoff saga
Better.com CEO “taking time off” after layoff saga
arrow_forward_ios

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

Loading...