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Bank of America Announces More Mortgage Defaults

Symbolizing the hang-over of the subprime mortgage crisis, Bank of America reported a 4th quarter loss of $1.2 billion, or 16 cents a share, as write-downs and charges tied to the packaging of and defaulting delinquent loans. There were to many companies offering programs that included a mortgage for bad credit.

Brian T. Moynihan, who took over as chief executive of Bank of America one year ago, has spent much of that time cleaning up the fallout from a series of disastrous acquisitions in recent years, including the 2008 purchase of Countrywide Financial, the subprime home loan specialist whose practices typified the excesses of the housing boom and ensuing bust.

Indeed, the earnings report included a series of one-time losses, most notably a $4.1 billion charge for mortgage repurchase claims, including the impact of an agreement late last month with Fannie Mae and Freddie Mac, the government-sponsored mortgage giants, to buy back troubled loans. In addition, Bank of America took a noncash charge of $2 billion to reflect a write-down of goodwill on its acquisition of Countrywide.

Posted in Subprime mortgage news.

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