Will its real estate holdings doom Bank of America?

Yves Smith at Naked Capitalism thinks B of A’s RE holdings might be too much for the financial giant. He writes:

It is clear that the Charlotte bank has too much in the way of legal liability that it will not be able to shed and yet-to-be-taken writedowns on balance sheet items (for instance, roughly $125 billion of home equity loans and junior liens on residential real estate as of end of last year) for it not to be at risk of a death spiral.

The post is long and detailed — plenty to chew on for you financial geeks.

Click here to read “Bank of America Death Watch.” (Yeah, the title is a bit over the top, but who knows?)

A related Bloomberg story, “Bank of America Says Mortgage Buyback Claims May Exceed Prior Estimate,” quotes Tony Plath, a professor of finance at the University of North Carolina in Charlotte: “I don’t think it’s anything nefarious, it’s just that they don’t know what the magnitude of losses in that portfolio will be.”

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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