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Bank of America And Citigroup Loosing In Mortgage Lending
Bank of America and Citigroup both posted their 1st quarter results that show further indication that what started as a subprime mortgage lending problem has reached further into the US economy.
There is no doubt that the big toll of losses related to these companies 1st quarter earnings were largerly affected by mortgage losses that look as if they could continue, especially in "high rate" neighborhoods for another couple of years. A new trend of BoA's mortgage defaults are now coming from US homeowners with 2nd mortgages, homebuilders and small business owners.
Citigroup is making up most of their losses from the mortgage meltdown by focusing on transaction services which showed a record net income. International retail sales also grew at the bank by 21 percent. Citigroup posted a first quarter net loss of $5.1 billion for the first quarter of 2008.
Bank of America, the 2nd largest bank in the US, posted a $1.21 billion profit for the first quarter of 2008 while putting away $3.30 billion into reserves. The bank also reported a 32 percent increase in direct to cosumer mortgage originations.
Bank of America shut down their wholesale mortgage division around October 25th 2007 while Citigroup still has their wholesale mortgage division running but are found on the mortgage implode-o-meter as an ailing lender
Submitted by admin 4/22/08
Bank of America and Citigroup both posted their 1st quarter results that show further indication that what started as a subprime mortgage lending problem has reached further into the US economy.
There is no doubt that the big toll of losses related to these companies 1st quarter earnings were largerly affected by mortgage losses that look as if they could continue, especially in "high rate" neighborhoods for another couple of years. A new trend of BoA's mortgage defaults are now coming from US homeowners with 2nd mortgages, homebuilders and small business owners.
Citigroup is making up most of their losses from the mortgage meltdown by focusing on transaction services which showed a record net income. International retail sales also grew at the bank by 21 percent. Citigroup posted a first quarter net loss of $5.1 billion for the first quarter of 2008.
Bank of America, the 2nd largest bank in the US, posted a $1.21 billion profit for the first quarter of 2008 while putting away $3.30 billion into reserves. The bank also reported a 32 percent increase in direct to cosumer mortgage originations.
Bank of America shut down their wholesale mortgage division around October 25th 2007 while Citigroup still has their wholesale mortgage division running but are found on the mortgage implode-o-meter as an ailing lender
Submitted by admin 4/22/08