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BofA loses $1.6B on mortgage costs

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Bank of America today reported a $1.6 billion loss in the fourth quarter after its costs related to bad home loans increased, according to Crain’s. The loss available to shareholders after paying out dividends was 16 cents per share, though analysts had predicted the bank would earn 18 cents a share. The bank reported revenue of $22.4 billion for the quarter, compared to $25.1 billion in the previous quarter. The bank also kept aside an additional $4.1 billion for bad home loans that it could be forced to buy back from Freddie Mac and Fannie Mae and another $1.5 billion for litigation expenses. Investors say that the bank should take back the bad home loans because they were sold on improper documentation. The bank’s losses from lending in its credit card and home loan business declined $414 million from the third quarter of 2010, due to a drop in delinquencies and bankruptcies. [Crain’s]

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