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http://www.bloomberg.com/news/2011-0...n-outlook.html
...More brilliance from the banking sector that will undoubtedly be rewarded...
The 51-year-old Moynihan...has tied his firm’s performance to a recovery in home prices this year -- a prediction more optimistic than one made by the bank’s own economist. Underestimating the slump in U.S. real estate led to $3 billion of expenses in the past two quarters, and Bank of America said it may suffer $1.5 billion in losses for every four percentage points that declines exceed forecasts.
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Bank of America, based in Charlotte, North Carolina, holds $408 billion of mortgages and home-equity lines.
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The impact of lower home prices helped drive a 36 percent decline in first-quarter profit at Bank of America to $2.05 billion. The bank set aside another $1 billion to cover new demands for mortgage refunds and didn’t cut its $10 billion upper estimate of possible payments to claimants other than Fannie Mae and Freddie Mac, even after the Assured settlement reduced the pool of disputes. In both cases, the company cited falling home prices.
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Bank of America’s housing-price targets are updated quarterly, allowing the lender to adjust estimates to reflect market conditions, Chief Financial Officer Charles Noski, 58, said last month in an interview.
“At any point in time, we have the opportunity to reflect the most current thinking, not only of the various indexes but of our own economists on coming to a collective view on how housing prices should behave,” Noski said. The bank later said Noski is relinquishing his post and becoming a vice chairman.
[..]
Bank of America, based in Charlotte, North Carolina, holds $408 billion of mortgages and home-equity lines.
[..]
The impact of lower home prices helped drive a 36 percent decline in first-quarter profit at Bank of America to $2.05 billion. The bank set aside another $1 billion to cover new demands for mortgage refunds and didn’t cut its $10 billion upper estimate of possible payments to claimants other than Fannie Mae and Freddie Mac, even after the Assured settlement reduced the pool of disputes. In both cases, the company cited falling home prices.
[..]
Bank of America’s housing-price targets are updated quarterly, allowing the lender to adjust estimates to reflect market conditions, Chief Financial Officer Charles Noski, 58, said last month in an interview.
“At any point in time, we have the opportunity to reflect the most current thinking, not only of the various indexes but of our own economists on coming to a collective view on how housing prices should behave,” Noski said. The bank later said Noski is relinquishing his post and becoming a vice chairman.
...More brilliance from the banking sector that will undoubtedly be rewarded...
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