BofA missing out on huge profits from mortgages

TRD 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
Housing and Urban Development Secretary Ben Carson (Credit: Getty Images, iStock)

HUD wants to jumpstart bank lending on low-income homes

Lenders issued the most mortgages in 14 years last quarter (Credit: iStock)

Nonbank lenders could give serious boost to cooling housing market

Clockwise from the top left: Jackson Park at 28-40 Jackson Avenue, 240 Willoughby Street in Fort Greene, 664 Pacific Street in Brooklyn, and 247 Metropolitan Avenue in Williamsburg (Credit: StreetEasy, Google Maps, Pacific Park Brooklyn, The Pod Hotel)

These were the top 10 outer-borough loans last month

The number of closed sales fell by more than 14 percent year over year in the third quarter (Credit: iStock)

Low mortgage rates are killing Manhattan’s all-cash buyer

Jackson Park at 28-40 Jackson Avenue and Tishman Speyer's Rob Speyer (Credit: StreetEasy and Tishman Speyer)

Tishman Speyer locks in $1B in financing for Jackson Park

One Bryant Park (Credit: The Durst Organization)

Bank of America leads $1.6B refi for tower named after it at One Bryant Park

(Credit: iStock)

Despite housing market slowdown, mortgage lenders just had a great second quarter

The Daily Dirt: The dark cloud hanging over buyers

The Daily Dirt: The dark cloud hanging over buyers

arrow_forward_ios
Loading...