MBS MID-DAY: Recap of Econ Data


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8:46AM  : 
Mortgages Plague Bank of America Earnings
(TheStreet) — Bank of America(BAC_) lackluster first quarter earnings performance can be summed up in two words: mortgages fallout. The bank reported first quarter earnings of $2 billion, or 17 cents a share, missing Thompson Reuters analysts estimates of 27 cents a share. Results were weighed down by a $38.5 billion settlement the bank reached with monoline insurer Assured Guaranty(AGO_) that resolves its outstanding and potential repurchase claims against BofA. The agreement includes a cash payment of $1.1 billion to Assured Guaranty, and a loss-sharing reinsurance arrangement that has an expected value of approximately $470 million. “This agreement is an important step towards resolving non-Government Sponsored Enterprise legacy issues on terms beneficial to our company,” said Terry Laughlin, legacy asset servicing executive in a statement issued Friday. Separately, Bank of America reported a net loss of $2.4 billion in consumer real estate services compared, to a net loss of $2.1 billion for the first quarter in 2010. Revenue declined by $1.4 billion, and noninterest expense increased by $1.6 billion from the year-ago quarter. Bank of America reported that factors in the decline in mortgage banking income include a $487 million increase in the representations and warranties provision, a $534 million decrease in service charge income from overdraft policy changes, a decline of $943 million from fair value adjustments related to structured liabilities and tighter credit spreads. While provisions for credit losses decreased to $1.1 billion from $3.6 billion in the year-ago quarter from improving delinquencies and lower net charge offs, fewer home sales and more legal issues plagued the balance sheet.

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Article source: http://www.mortgagenewsdaily.com/mortgage_rates/blog/207733.aspx

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