The residential finance division of Bank of America posted a stunning loss of $13 billion in the second quarter as delinquent mortgages, expected legal settlements and charges tied to 'reps and warranties' on loans sold into the secondary market hammered its performance.
In the same quarter a year ago the bank’s mortgage business earned $1 billion.
The residential finance and servicing business of the bank is housed in its consumer real estate division which lost $14.5 billion overall, compared to a lost of $1.5 billion in 2Q10.
At press time BofA officials were holding a conference call with investors and analysts.
Over the past year the bank has exited both the wholesale channel and reverse lending. It has been plagued by the ‘legacy’ assets of Countrywide Financial Corp., which it purchased in August 2008.