Bank of America (BoA), which releases first quarter earnings shortly, is facing more writedowns on its Countrywide Financial Corp. (CFC)-related mortgage holdings, according to a new report from Credit Suisse.

Initiating coverage of BoA with a "neutral" rating, CS analyst Moshe Orenbuch writes that when the bank bought Countrywide last summer CFC's $92 billion (mostly) residential portfolio was marked down by $14.4 billion or 15.6%.

In his new report Orenbuch said, "further headwinds could put losses in excess" of the original marks. The $92 billion includes $33 billion in home equity loans, and $26.4 billion in payment option ARMs, two of the most toxic asset classes out there.

Several months after the July 1 deal closed, BoA wrote down the portfolio by an additional $750 million. Citing CFC in particular, Orenbuch said, "credit quality deterioration is fairly broad-based" at the bank.

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