Despite reduced mortgage banking income, Bank of America (BAC) reported a $3.1bn net income for Q210, holding steady from the $3.1bn earned in Q110 and $3.2bn earned a year go. Total revenue for the bank’s home loans and insurance division lost $1.5bn in Q210, down from the $2bn the division lost the previous quarter. Total revenue for BofA home loans and insurance fell 37% in Q210 to $2.7bn. BofA funded $72bn in first mortgages in Q210, up from $69.5bn in the previous quarter.  But the home loans and insurance division losses were driven by an $802m increase in representations and warranties expense, combined with lower margins from a drop in refinance activity. “Less than favorable” results from the mortgage servicing division also added to the drop. Lower production expense in the home loans and insurance division were offset by increased costs related to default management staff and loss mitigation efforts. Since the start of 2008, BofA and its acquired Countrywide, completed nearly 650,000 loan modifications. In Q210, BofA completed more than 80,000 modifications, including 38,000 trial modifications that converted to permanent status under the Home Affordable Modification Program (HAMP). Offsetting losses in mortgage banking, BofA sold a number of “non-core” assets in Q210.  The sales included the company’s equity position in MasterCard for a pretax gain of $440m and the sale of a $1.9bn portfolio of limited partnership interests in private equity funds. The sales were part of a company strategy to focus on its core business and strengthen capital ratios. "Our quarterly results show that we are making progress on our strategy to align around our three core customer groups - consumers, businesses, and institutional investors - and create the financial institution that customers tell us they want, built on a broad relationship of clarity, transparency, and helping them manage through challenging times," said BofA CEO and president Brian Moynihan. Write to Jon Prior.