BofA Suffers Huge Loss- More Foreclosures…
October 19th, 2009 Categories: Loan Modification, Mortgage and Loans, Real Estate Trends, Sacramento Real Estate, Sacramento Real Estate Trends
Bank of America (BOA) announced today that it suffered a $2.2 billion loss in the third-quarter quarter. Contributing to that was a $1.2 billion dividend payment to its preferred shareholders, including the U.S. government, credit losses within some of its consumer-related businesses, and $402 million after it agreed to eliminate a loss-sharing agreement it had struck with the government earlier this year. “Obviously, credit costs remain high, and that is our major financial challenge going forward.” Most of this quarter’s losses were in Bank of America’s mortgage and credit card businesses, which together lost more than $1 billion during the July-September period.
BOA funded $95.7 billion in first mortgages, selling purchase or refinance loans to nearly 450,000 borrowers, including $23.3bn in mortgages to 154,000 low- and moderate-income borrowers during the quarter. About 39% of all the first mortgages were for purchases. Year-to-date at the end of Q309, BOA modified the mortgages of approximately 215,000 customers, and an additional 98,000 BOA mortgage customers are in the trial stage of a Making Home Affordable Modification Program (HAMP) workout. The overall results were slightly worse than Wall Street was expecting. Analysts had anticipated that the company would suffer a loss of 21 cents a share, according to Thomson Reuters, but in fact lost 26 cents a share.
Foreclosures up
Since government intervention began in September 2008, foreclosure sales remain stunted, dropping 8.6% from the previous month and 40.6% from a year ago. But the percentage of foreclosures sold to third parties, who are usually investors, grew by 215% from last year and 3.27% from August, according to ForeclosureRadar’s monthly foreclosure report. Arizona leads all states with an increase of filings by 36.1% in September, followed by Florida (29.6%), Texas (24.3%), and Michigan (18.22%). Filings in California increased only 1.08% in September, but the volume has grown by 123% from last year.
Urban areas were hit hardest and spurred the increases. In Arizona, the statewide increase was fueled by a massive 81.3% increase in Phoenix foreclosures. Foreclosures in Las Vegas jumped 47.4%; Atlanta had a 39.9% increase; Chicago’s rates climbed 36.2%; and Houston had a 33.2% spike in foreclosures, according to ForeclosureListings.com. RealtyTrac says foreclosure filings in Q309 increased to a level unseen since it began reporting the figures in January of 2005.
