The bank said it lost $1.2 billion in the fourth quarter of last year, more than six times its loss from the same period in 2009. Perhaps more troubling were the bank's warnings about what might be coming: The company could be forced to pay out as much as $10 billion to resolve some disputes over the toxic mortgages it sold to investors around the globe.I don't have a lot of sympathy for the banks. They get bailed out by the government repeatedly either through the dirty Fed (W.C.'s term) or by direct intervention. They bought this trouble themselves with shoddy loan practices and lack of transparency. Even though the article stated that Wells Fargo and Chase have improving profits, I am concerned that the banks are facing big losses on dud loans, that will now be even more difficult to recover, because of past bad practice.
. . .
Borrowers continue to default on loans. Allegations of robo-signing and other irregularities in foreclosure practices have made it harder for the banks to evict delinquent homeowners, sell the houses and cut their losses. Government investigations loom.
Friday, January 21, 2011
Bank of America Loses $1.2 Billion in Just One Quarter
The Washington Post is reporting that Bank of America is bleeding money at a serious rate.
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Should this read "Bank of America Loses Just $1.2 Billion in One Quarter?" It should have been much worse. Most of it did come from defaulted mortgages, but most were passed on to the federal government via their guarantees. These are the ones the government wouldn't guarantee (didn't meet their guidelines). Yes, we bailed them out again.
ReplyDeleteWow, that's all?
ReplyDeleteWith their customer service, predatory actions on military families and shoddy paperwork, it should be much more.
How far it has fallen since being Bank of Italy.
Again, do we really know the quantity of toxic assets held by the banks and Fannie and Freddie?
ReplyDeleteI know I kind of sound like a broken record on this but, to me, this housing bubble is nowhere close to unwinding let alone recovering.
They are absolutely terrible when indemnified on an loss draft on an insurance claim. The homeowner is instructed to endorse and send themm the check and it goes into the abyss. I agree, customer service is not a priority.
ReplyDeleteI am with Dean on his opinion about the housing bubble. And, thanks to WC, I always insert the word "Dirty" in front of the word "Fed" in news reports.
ReplyDelete