BOA has ONE TRILLION of "problem home" mortgages! ONE trillion!!!!!

[dixiegrrrrl]

It certainly was trying to NOT admit to that, but the figure came out in this story of it continuing stock problems, its shakeup of upper management, and plans for laying off 49,000 people as it re-organizes to address the ONE TRILLION bad debt issue.
Oh, and did I mention all those lawsuits?

Read...enjoy.... I did.

"Bank of America Corp officials have discussed slashing roughly 40,000 jobs during the first wave of a restructuring, the Wall Street Journal said, citing people familiar with the plans."

Snip:
"BofA had earlier planned to cut 3,500 jobs, its Chief Executive Brian Moynihan had said in a memo to staff on August 18, as it tries to come to grips with $1 trillion of problem home mortgages."

http://finance.yahoo.com/news/BofA-discussing-about-40000-rb-1925484752.html?x=0&sec=topStories&pos=2&asset=&ccode=

[msongs]

1. how many top management types have been fired for running the company into the ground? or prosecuted

for nefarious schemes?

[dixiegrrrrl]

5. TWO top management have been fired in this latest re-shuffle.

But three new people were hired in top management.
Middle management is being laid off in some cases, some bonus money is being saved.

But, as my sig line now says.......

Prosecutions?


ZERO prosecutions, of course.
some SEC "fines".

Words not in print about any of the banksters:

Investigation
Prosecution
Conviction
Sentencing

[Ruby the Liberal]

7. Price and Krawcheck

No prosecutions. Yet.

Ken Lewis needs to be given a stupidity award for Countrywide though. Prosecution is too good for him. He will forever be a pariah for that move.

[Warpy]

2. Thosse aren't bad mortgages, meaning in default and uncollectable

It means the mortgagees are underwater and barely hanging on.

You'd think the bank would catch a clue and start working with these people to modify those things instead of grabbing their houses and then letting them rot.

It took banks forever to catch a clue in the Depression, too.

[vets74]

18. The regional Feds think we have $9.1-trillion in total home mortgages.

How much of this is the Countrywide mortgage portfolio ? How much of this is underwater ? Non-Performing ?

How much is BofA internally generated mortgage portfolio ? Underwater ? Non-Performing ?

Other acquisitions ? These are very big numbers -- but hard to verify.

I know that BofA took over the Countrywide organization mid-2008. FDIC and The Fed arranged this deal to keep Countrywide from going bankrupt and roiling the national mortgage market even worse.

BofA seems to have the option -- even now -- of taking Countrywide into bankruptcy. That tosses some $34-billion of up-front costs. Peanuts. Really, peanuts.

Countrywide had huge liabilities developing in its second-home and sub-prime lending exposures.

...The Fed concluded that 'although Bank of America would become the largest mortgage loan servicer in the United States on consummation of the proposal, the mortgage servicing market would remain unconcentrated.'

The Fed decision said a Department of Justice investigation had concluded that the merger would 'not likely have a significant adverse effect on competition in any relevant banking market.'

Countrywide was forced to sell itself to avoid bankruptcy after suffering heavy subprime-related losses. The Fed concluded that BofA and its subsidiaries are 'well capitalized and would remain so' after the merger.

-- Thompson Financial News, 2008, relaying Fed statements

But Countrywide only carried 1% of household checking and savings accounts.

[BOHICA12]

3. And I am forced to do business with them .....

..my mortgage was sold to Countywide and the rest is history. Thank goodness I owe less than a used Lexus on the note - free and clear soon.

[itsrobert]

4. Op your title is misleading. It is not 1 trillion of bad mortages

"$1 trillion of problem home mortgages"

You made is sound like 1 trillion mortgages which would be a number that would way higher than $1 trillion.
unrec for sensationalizing misleading headline.

[dixiegrrrrl]

8. fixed.

[frazzled]

9. Yeah, I was wondering how the hell there were a trillion mortgages

in a country of only 300 million people. I don't think there could be that many in the world.

I had to read the article, first of all, to confirm it was a trillion dollars, and that these are mortgages with problems. I should always ignore posts with all caps in them.

[bbgrunt]

12. yes, I was wondering where every home on the planet and

then some were if they were all considered bad mortgages--given world pop is "only" about 900b.

[Hawkowl]

13. 10% is $100 Billion

5% loss would be $50 Billion. It is a still a bankrupting number. The government of Norway just filed suit against BofA, piling on to the US lawsuits which will in all likelihood, push the nominal total of lawsuits up to $100 Billion.

There simply is no way for BofA to survive as a private bank. Yes, BofA has a fantastic total dollar amount of deposits, but those are liabilities, not assets. They can be used to plug liquidity holes, but simply exacerbate the solvency issue.

BofA needs to be nationalized and parted out, similar to the way Sweden killed it's zombie banks in the 1990's.

[Ruby the Liberal]

6. Moynihan was worried that the board was going to replace him with Krawcheck

Not surprised about the mortgage number. More analysts than I can count have been clamoring for months now for BAC to disclose their exposure (to that, sovereign debt and lawsuits). On the latter, they knew about the AIG suit since January but didn't bother to include it in either their April or July Quarterlies.

THRILLED this is coming to light...

[dixiegrrrrl]

10. they lost about 12 billion over the last year.

Tho have no clue if that is "real" money or paper numbers.

Notice that the top heads of BOA are still there, always the last to go, no way will they give up the mis-begotten bonuses, nope, some poor back office paper pushers have to get fired to protect THOSE.

[Ruby the Liberal]

14. Krawcheck deserves credit

She ran not only the most profitable, but the only profitable arm of the business. Why she was a threat and had to go.

Like I have said before, the mortgage arm will be their downfall into irrelevancy. Selling off/IPOing Merrill is the only chance they have to buy any time.

[dixiegrrrrl]

16. Buying Merrill seemed to really have been a stumbling block for them.

I have had feeling for several years that BOA is going to get "an offer it can't refuse" from Goldman..can't see Citi or Chase being able to do that right now.

[hlthe2b]

11. I believe that might be $1 trillion dollars worth of mortgages...

not a total of one trillion mortgages. Right? :shrug: Remains shockingly abysmal to contemplate.

[dixiegrrrrl]

15. Right...I fixed the headline.

Still, that is a huge number.
( appreciate your politeness in pointing that out)

No idea of how they arrived at that number, or how far back it goes.

[golfguru]

17. The underwater mortgages are NOT all problematic

My sister-in-law & her husband bought a townhome in Arizona 4 years ago when housing bubble was near its top. Currently one can buy similar unit next doors for not much more than half.

She wants the bank to refinance the 80% mortgage but they refuse because the balance on mortgage is higher than current market value.

But here is the real story. This couple likes living in their home and are making regular monthly payments. They do not want to ruin their credit by walking away and defaulting on the mortgage.

So what looks like a problem mortgage is functioning just fine for the bank.

[Name removed]

19. Deleted message

Message removed by moderator. Click here to review the message board rules.