In news that is directly related to the foreclosure crisis in Pinellas County, Florida, Bank of America last week announced losses totaling more than one billion dollars for the third quarter of 2009. See story here. http://www.latimes.com/business/la-fi-bank-america17-2009oct17,0,4906039.story?track=rss So why should the everyday American be concerned with this? Well, anyone involved in fighting Bank of America or Countrywide (who Bank of America assumed in 2008) in either foreclosure or who is attempting a short sale with Bank of America will tell you that Bank of America is one of the worst corporations to deal with in the process.
The horror stories of dealing with short sales in general are legendary, but in my experience Bank of America is among the worst. The problem is compounded when you are defending or trying to resolve issues related to Countrywide mortgages. While other lenders are finally making reasonable business decisions, liquidating their losses and moving on, Bank of America seems stuck and unable to make any decisions or pursue any reasonable solutions in the individual cases I am actively working on.
While it is impossible to know just exactly how much Bank of America paid for the mortgages they assumed as part of the Countrywide takeover, informed professionals (who are familiar with the technical, legal and other problems that plague many of the Countrywide mortgages) assume that the purchase price was cents on the dollar relative to the face value of the mortgages. Even if this assumption is true, Bank of America would need to be making reasonable business decisions on how to treat and servicing the existing Countrywide loans to earn a profit on them. Based on what I’ve seen up until this point in time, they have not yet started making the kind of reasonable short sale or foreclosure decisions necessary to make the venture profitable.
If the decision-making at Bank of America continues as it is, expect continued losses at Bank of America!