Bank of America Refinance Mortgage Rates – Home Loans Lower on April 30th for First Time Home Buyers

Bank of America refinance mortgage rates remain at low levels as we are seeing home loans around 4.85% for the 30 year fixed mortgage. As April comes to a close and the first time home buyer tax credit is set to expire many first time buyers are flooding the market hoping to get a very low mortgage rate with a great home price.

Bank of America and almost all mortgage lenders continue to enjoy the low interest rate environment. Just this week the Federal Reserve Bank announced that they are going to take the necessary steps to keep interest rates low for an extender period of time. This means that banks and lenders will be able to add new customers.

Customers are benefiting from this low interest rate environment as they are able to borrow money at much lower rates. This means that mortgage and car payments are likely much less. With this being the case, well qualified borrowers can save a significant amount of money that they can use to buy some of the finer things in life that they desire.

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FTSE's fall accelerates after Bank of America and Morgan Stanley updatesFTSE's fall accelerates after Bank of America and Morgan Stanley updates

An opening fall on Wall Street has accelerated declines in London shares, with both markets currently down around 1%.

The US market has been spooked by below part results from Bank of America and Morgan Stanley, which has helped push the Dow Jones Industrial Average down 110 points. It has now lost the bulk of yesterday's gains in just the first half hour of trading.

Meanwhile the FTSE 100 has fallen 53.65 points to 5459.49. The other concern for investors which has emerged today is a further sign of China tightening its monetary policy, raising fears that demand in the country may be hit and weaken the global economy further as it tries to recover from recession. The Chinese central bank has reportedly instructed banks to curb their lending for the rest of January after a splurge of credit so far this year.

So UK quoted miners are falling sharply despite news of record production figures from BHP Billiton. BHP is down 61.5p at 2018.5p while Xstrata is now 63p lower at 1154.5p and Antofagasta is off 51.5p at 987.5p. Nine of the top ten fallers in the leading index are miners, the exception being Imperial Tobacco, down 74p at £19.91. David Buik at BGC Partners said:

Investors have taken some money off the table and will reflect on the message being circulated, which is that the recovery will take longer to bring forth fruit than many hoped for.

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Bank of America's Securities Profit Swings $12.1 Billion

Bank of America reported Wednesday morning that its global securities business produced net income of $7.1 billion in 2009, a swing of $12.1 billion over 2008. The 2009 results include the acquisition of Merrill Lynch, announced in September 2008 and completed on Dec. 31, even as the brokerage╒s losses from subprime assets exceeded then-chief executive Kenneth Lewis╒ expectations.

Revenues for its Global Markets unit, which includes fixed income, currency and commodity trading as well as equities operations, reached $20.6 billion, a swing of $24.4 billion. In 2008, the comparable figures were negative revenue of $3.8 billion and a net loss of $4.9 billion.

Fixed income, currency and commodities revenue reached $14.9 billion, the company said, driven by sales and trading revenues of $12.7 billion. ╥Credit products benefited from improved market liquidity and tighter credit spreads,╒╒ the company said, in its earnings summary.

Equities revenue of $5.7 billion was driven by the addition of Merrill Lynch and ╥positive market sentiment. In the fourth quarter, the markets unit reported net income of $1.1 billion.

Fourth-quarter net income increased $4.8 billion compared with a net loss of $3.7 billion a year earlier.

Global Wealth and Investment Management net income in 2009 rose to $2.5 billion, also driven by the addition of Merrill Lynch, from $1.4 billion. Net revenue more than doubled to $18.1 billion, from $7.8 billion.

Overall, Bank of America Corporation reported 2009 net income of $6.3 billion, compared with net income of $4.0 billion in 2008. But its shareholders did not fare so well. When the company counted preferred stock dividends and the impact of repaying the U.S. government's $45 billion preferred stock investment in the company under the Troubled Asset Relief Program (TARP), income applicable to common shareholders was a net loss of $2.2 billion, or $0.29 per diluted share.That compared with 2008 net income applicable to common shareholders of $2.6 billion, or $0.54 per diluted share.

In the fourth quarter of 2009, the company's net loss narrowed to $194 million from a loss of $1.8 billion a year earlier.

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Bank of America Posts Loss After Firm Repays Bailout

Bank of America Corp., the largest U.S. lender, posted a quarterly loss and its first full-year deficit in more than two decades, driven by the cost of repaying U.S. bailout money and defaults on consumer loans.

The fourth-quarter loss including the cost of exiting the Troubled Asset Relief Program widened to $5.2 billion, or 60 cents a share, from $2.4 billion, or 48 cents, a year earlier, according to a statement. Excluding TARP costs, the deficit was $194 million, the third in the past five quarters for the Charlotte, North Carolina-based lender.

New Chief Executive Officer Brian T. Moynihan has promised a “DNA change” as the firm focuses on operations instead of takeovers and bailouts. Credit cards and home lending were both unprofitable, the bank said. Costs tied to bad loans declined from the third quarter, and the bank said it benefited from gains at investment and brokerage services.

“Economic conditions remain fragile and we expect high unemployment levels to continue, creating an ongoing drag on consumer spending and growth,” Moynihan said in the statement. “We are encouraged by signs the economy is improving, as we have seen in the stabilization of our credit costs, particularly in the consumer business.”

The quarterly report is the first under Moynihan, 50, after he took over on Jan. 1 for Kenneth D. Lewis, 62, who spent more than $120 billion on acquisitions since 2004. Moynihan has said the bank doesn’t need more big purchases to recover from the recession.

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Is Bank of America Doing Enough to Help Homeowners?

Bank of America says it’s working hard to help struggling borrowers keep their homes. It’s gone door to door to reach distressed homeowners, hired thousands of staffers to work with those customers, and changed the repayment terms of more than 700,000 mortgages over the past two years.

The Charlotte bank’s critics paint an entirely different picture, saying it isn’t doing nearly enough. As proof, they point to a Treasury report from early December that said Bank of America had completed modifications for only 98 mortgages under a government program called HAMP, or the Home Affordable Modification Program. So who's right, the bank or its critics? The truth lies somewhere in the middle.

Today, the bank is expected to announce that it has completed more than 3,200 HAMP modifications, a huge increase from the last tally of 98. It will also announce that it has another 20,000 that are about to be completed. In Treasury jargon, these completed modifications are referred to as "permanent modifications."

The bank's release will come one day ahead of the newest Treasury scorecard. Those monthly scorecards tally how many HAMP modifications Bank of America and the other big banks have under way.

The bank's critics have pointed to two sets of figures in those reports. They have noted that the bank has started modifications for only a small fraction of the loans that are potentially eligible for the program - about 157,000 out of just over 1 million, or 15 percent, according to the December report, though that percentage could rise in the new report. CitiMortgage, JPMorgan Chase, Wells Fargo and GMAC fared better, each with at least 30 percent in the December report.

Bank of America disputes the Treasury's estimate that there are more than 1 million Bank of America borrowers who are eligible for HAMP. The Treasury's estimate is based on the number of borrowers at least two months in default; it does not take into account how many of them meet HAMP's income requirements and other prerequisites. The Treasury says its estimate "isn't perfect, but it's something to measure against."

Bank of America points out that it has modified hundreds of thousands of loans without the government program, and those modifications aren't included on the Treasury scorecard. About three-quarters of the bank's modifications over the past two years have been outside of HAMP.

Banks have always been able to modify mortgages, but the issue has heated up as millions of homeowners face foreclosure and the effects of the housing crisis spread throughout the broader economy. When a bank modifies a mortgage, it can lower the interest rate, extend the life of the loan or even forgive some of the principal - anything that might help a borrower keep his home. It's generally in the bank's best interest too: It's usually more profitable to modify a mortgage than to foreclose.

To be sure, plenty of borrowers have legitimate complaints about the process. Some have encountered unhelpful customer reps, lenders who never seemed to get their faxes, and bankers who gave them conflicting information about how to apply.

The latest criticism of Bank of America came from a second set of figures released in the Treasury's December report. It gave the skeptics a new arrow in their quiver, because it was the first to measure how many modifications had been transitioned from trial to permanent. That's where Bank of America had racked up only 98 modifications. Wells Fargo, by contrast, had completed more than 3,500 permanent modifications, and JPMorgan Chase had done more than 4,300.

The trial modifications work like this: After a bank and a homeowner agree to new mortgage terms, the bank places the homeowner on trial for three months or more. If the homeowner is successful in paying the modified mortgage, then the modification is made permanent.

When the Treasury created HAMP, it instructed banks to do the modifications this way.

Bank of America doesn't totally deserve the firestorm over permanent vs. trial modifications, according to some experts. For one thing, it's sometimes the fault of the borrower, not the bank, when there's a holdup in the conversion. Sometimes, the borrower doesn't pay the modified mortgage. Other times, they don't submit the paperwork.

Bank of America said last month that it had about 50,000 customers who had successfully paid three months of modified mortgages but hadn't turned in the paperwork for converting them to permanent. The bank said it's trying to reach those customers by phone, mail and face to face. That can be an uphill battle because borrowers who are in trouble are often wary of their bank.

Bank of America says it's committed to HAMP and points out how it has more trial modifications under way than any other bank: Today, it's expected to announce that it has 200,000 customers in trial modifications under HAMP, up about 43,000 from last month. It says it plans to be No. 1 in permanent modifications as well.

Mark Fogarty, editor of National Mortgage News, said after the December report that Bank of America's low number of permanent modifications wasn't unique. Though Wells and JPMorgan Chase both had several thousand permanent modifications in the December report, Wachovia had just 351. CitiMortgage had 271.

Bob Gnaizda, who has worked with the Greenlining Institute and other advocacy groups to push Bank of America to modify more mortgages, said he doesn't think Bank of America's No. 1 status in trial modifications is an adequate measure. The trial modifications, he said, "are a gimmick by the banks to induce homeowners to make payments for a few more months rather than walk away."

But Gnaizda also said he's optimistic that Bank of America will eventually lead the way in permanent modifications. He praised former chief executive Ken Lewis for getting out of subprime lending and cleaning up questionable practices at Countrywide Financial, which it bought in 2008.

Last week, on his first real day on the job, new CEO Brian Moynihan said that helping struggling homeowners is the key consumer issue on his agenda. Speaking to a Raleigh crowd, he asked that the bank's efforts be judged with respect to challenges like high unemployment and the competing interests of the parties involved in each mortgage.

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Moynihan: Bank of America didn't protect itself

WASHINGTON Bank of America's new chief executive, Brian Moynihan, told the panel investigating the financial crisis Wednesday that his institution failed to protect itself by considering worst-case scenarios. Moynihan also defended his firm's compensation policies, expected to lead to healthy year-end bonuses for many executives despite the economic downturn.

"The mistakes we made and the most losses we've taken have actually been in credit cards and mortgages," he said. B ofA "didn't do the kind of testing you actually do in a trading book, saying 'What if housing goes down 40 percent?'" Moynihan said.

Moynihan kept a low profile during the first hearing of the Financial Crisis Inquiry Commission. He politely answered questions and noted that he was not in his post when the crisis hit, leading to a $45 billion taxpayer bailout of his bank.

Commission member Keith Hennessy asked whether the bankers were discussing with each other the possibility that, "if things get really bad, we can always count on the government to step in."

"I wasn't party to those discussions," Moynihan said. "But... on the darkest days, all of us had to go to bed thinking if this thing doesn't stop, what could happen?"

Moynihan, who previously led Bank of America's consumer business, said in his prepared testimony that the job gave him "a firsthand knowledge and a recognition of the hardships that many hard-working families and small businesses experience across America."

He said that the crisis has taught his bank "some very valuable lessons":

That credit "starts and ends" with sound prudent lending practices, and that rating agencies are no substitute for clear assessments of a borrower's ability to repay the loan.

Banks took way too much risk, and banks must hold more capital to cover potential losses.

Liquidity, the ability to convert assets to cash, is crucial so that banks aren't forced to sell assets at discounts to gin up capital to cover margin calls and or pay off deposits.

It's time to review accounting rules that prompt banks to reduce reserves against loan losses in good times and increase them in bad times.

As for the bank's compensation policies, he said, Bank of America officials "understand the anger felt by many citizens because institutions that received federal investments 15 months ago are now recovering and the pay of their employees reflect this recovery, especially in investment banking and trading areas."

However, he said, the bank has repaid its federal bailout money and "the vast majority of our employees played no role in the economic crisis or losses."

Although some employees were laid off, he said, the remaining 300,000 employees "are a valuable part of our future, and we need to pay them competitively to ensure that we can keep them so they can help our clients."

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Will it be a Happy New Year for Bank of America (NYSE:BAC) and Brian Moynihan?

When you look at what Brian Moynihan inherits with his role as CEO of Bank of America (NYSE:BAC) today, you do wonder whether the recent joke made by outgoing CEO Kenneth Lewis to employees about Moynihan, saying, “another unique characteristic about him is he wanted the job,” was in fact really a joke.

All the outsiders asked to lead the banking giant knew better than to accept the CEO position, which for them would probably be a no-win situation.

For Moynihan, he probably represents a neutral situation, as he no doubt is considered a sacrifice lamb as far as the board of directors go, because the short-term expectations of Wall Street and shareholders demand immediate results; something Moynihan or anyone else in his position wouldn’t be able to deliver.

There will be the usual short grace period given to Moynihan, but it won’t be long before the vultures start circling and pressure put on Moynihan to deliver results which aren’t realistic expectations, but will be demanded anyway.

What Moynihan faces is huge loan losses in 2010, which will come from their disastrous credit card portfolio, mortgages, and many other niches they serve.

All of this stems from the overly aggressive growth strategy, which included both high internal and external risks, which obviously the company wasn’t able to handle. Especially harmful was the acquisition of lenders who gambled big and lost in one of the worst credit bubbles in American history. Countrywide Financial Corp. was the most troubling of those for Bank of America because of their size and exposure in the mortgage market.

The bank at one time was even offering lines of credit to start-up businesses for up to $100,000.

Bank of America’s credit card business will also be a major challenge in 2010, as major problems which plagued the company in 2009 will continue on into the new year.

Much of this will come from the consequence of acquiring the huge credit-card company MBNA in 2006, which at the time was considered a great move, but has proved to be anything but that.

What was thought of as great risk management at that time, was in fact, just MBNA allowing their customers to be given large credit lines simply because the money was easy to get hold of. This eventually worsened when bank tellers at Bank of America were given the tools used by MBNA to sell pre-approved credit cards to a majority of their customers entering any branch of the bank, making the situation even worse.

Of the major banks in America, Bank of America has recorded the highest rate of credit card defaults, and that should continue into 2010, although Moynihan claims things have been stabilizing some since August. Still, he has stated in the past that it will take a “substantial number of quarters until we see charge-off rates return to levels which we are more comfortable with.” Moynihan also said the credit card business will never be as profitable as in the past for the company.

While the larger banks won’t be hit as hard as community banks for commercial loans, it will still be a big factor in 2010, where defaults are expected to peak sometime in the latter half of the year.

So that’s what Brian Moynihan is stepping into. It’s one of those situations where he will try to survive long enough to turn things around enough to give him some room to work with.

They will need a huge year on the investment banking side to give him the needed slack, and will all these negative factors weighing in, it’s hard to see how that could come about, but you never know.

The final factor as far as it relates to Moynihan as it relates to him personally, is he will get a better professional reception if he fails than someone coming in from the outside of the business who would be considered more of a rescuer. Moynihan won’t have that burden in the way an outsider would, so may be in a win/win situation going forward.

And if he’s lucky enough to extend things out long enough for Bank of America to eventually thrive, he’ll be able to name his job and price anywhere in the industry, and outside of it as well.

For Bank of America the future is cloudy and hazy, and it could be some time before any type of sustainable growth and profits are part of its experience going forward. Anything more than that will be a feather in Moynihan’s cap and a big boost for the bank.

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