"Bank Of America Housing Unit Lost Almost $1 Billion In Three Months"
Bank of America reported a $4 billion profit for the second quarter of 2013 on Wednesday, despite losing $923 million in its troubled real estate unit. It was the bank’s most profitable three months in two years.
But the housing unit, which has drawn criticism and lawsuits over various alleged abuses, has now lost over $11 billion over that same two years. The near-billion-dollar loss in this most recent quarter is actually the third-best quarter the bank’s real estate arm has had in that time, according to past earnings reports:
Bank of America bought Countrywide, then the nation’s largest subprime lender, in 2008. The acquisition has weighed the company down ever since, but it’s arguably been worse for the struggling homeowners now subject to the company’s lending practices. The story of the unit’s past four years is stuffed with alleged abuses and huge settlement payments.
Eight months after a federal mortgage modification program began in 2009, BOA had completed fewer than 100 modifications – last among big banks – and blamed the failure on its borrowers. In 2011 the bank paid $335 million to settle suits alleging Countrywide had systematically overcharged black and Hispanic borrowers. Despite agreeing to the 2012 mortgage fraud settlement with the government that was supposed to provide $17 billion in mortgage relief from BOA and the four other largest U.S. banks, the company dragged its feet on modifying loans for months. The bank is still failing to fully comply with the terms of that settlement.
Earlier this summer, whistleblowers alleged the BOA housing group paid cash bonuses for foreclosing on homeowners, conducted regular “blitzes” to wipe mortgage modification applications off the books even when they were valid, and instructed employees to lie to borrowers. The company has continued to use deceptive advertising for loans, in violation of consumer protection rules.