Charlotte Observer (NC) (05/14/08); Rothacker, Rick
The $118 billion home equity portfolio of Bank of America has become the biggest problem area for the Charlotte, N.C.-based bank, which saw its profits sink 77 percent to $1.21 billion in the first quarter. Profits were hurt by the $6 billion Bank of America had to set aside to cover current and future loan losses; in response, the bank is now focusing more on lending smaller amounts of money to borrowers, tightening lending standards and devoting more staff to providing assistance to borrowers. Bank of America made a strong push in the home equity business during the housing boom, but borrowers are having problems making payments as housing prices fall. Even though losses on home equity loans are likely to rise and more money will have to be set aside for bad loans in the periods to come, bank officials still expect to complete the acquisition of Countrywide Financial.
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