BofA Nonperforming Loans, Foreclosures Up 15% from a Year Ago

Bank of America (BAC) reported $35.7bn in nonperforming loans, leases and foreclosed properties in Q210, which is 15% above levels measured in the same quarter of last year. These loans and properties increased more than $5bn in total aggregate balance since Q209. The total did drop by more than $200m worth of these loans and properties from the $35.9bn reported in Q110. They represented 3.74% of all outstanding loans, leases and foreclosed properties at the end of Q210. BofA reported $3.1bn in Q210 earnings despite losses in its mortgage division. BofA is continuing efforts to keep these troubled mortgages out of foreclosure. Since 2008, BofA and the acquired Countrywide completed nearly 650,000 loan modifications. During Q210 alone, BofA completed 80,000 modifications, including 38,000 trial modifications that were converted into permanent workouts under the Home Affordable Modification Program (HAMP). If a modification does fail, BofA is putting an emphasis on selling the home through a short sale ahead of foreclosure. At REO Expo 2010, Matt Vernon, the short sale and REO executive at BofA said that the bank added 1,000 employees to the short sale staff and will “do everything possible to liquidate property prior to foreclosure.” Write to Jon Prior. Disclosure: the author holds no relevant investments.

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