Bank of America Funds $85 Billion in First Mortgages, Ups Loans Losses

April 20, 2009 No Comments »

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Bank of America said it funded a whopping $85 billion in first mortgages during the first quarter, though existing loans continued to sour.

The Charlotte-based bank and mortgage lender said it helped 382,000 borrowers either purchase a home or refinance their existing mortgage, with about 25 percent actually going to home purchases.

Additionally, the company said it originated $16 billion in mortgages to some 102,000 low and moderate income borrowers and $4 billion in home equity loan products.

As a result, the company plans to add 5,000 positions to its fulfillment sector, and said more than 6,400 employees were in place to assist with loan modifications.

During the quarter, 119,000 home loans were worked out via the company’s loan modification program, which is geared towards those seriously delinquent or likely to become so as a result of loan features, such as interest rate resets or payment recasts.

Meanwhile, the provision for credit losses rose to $13.4 billion from $8.5 billion as nonperforming assets climbed to $25.7 billion, compared with $18.2 billion last quarter and $7.8 billion a year ago.

The increase was attributed to continued deterioration in portfolios tied to housing, go figure.

“The fact that we were able to post strong, positive net income for the quarter is extremely welcome news in this environment,” said CEO Kenneth D. Lewis, in a release.

“However, we understand that we continue to face extremely difficult challenges primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment.”

Bank of America posted net income to $4.2 billion, or 44 cents per share, compared to net income of $1.2 billion, or 23 cents per share, a year earlier.

Shares fell $1.72, or 16.25%, to $8.88 in late morning trading on Wall Street.

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