Bank Of America Betting Billions That The Real Estate Market Will Rebound

Bloomberg:

At Bank of America Corp. (BAC), where the company's home-price forecasts have proved too good to be true, billions of dollars of new losses are at stake along with the credibility of Chief Executive Officer Brian T. Moynihan.

Read the whole story: Bloomberg

Comments

[RadicalAmerica]

12:03 AM on 05/14/2011

The more $$$ that BoA loses, the better I feel.

[Craig2]

01:17 AM on 05/12/2011

Now, that the Banksters own a whole lot of peoples homes through foreclosure, it's time of real estate to rebound. Oligarchs manipulating the market. Capitalism is dead.

[Aj Beamish]

12:15 AM on 05/12/2011

Let's see, people are out of work and those with work are making about what they made 25 years ago (if they are that lucky). House prices are pretty much the same as they were in 2007...

OK so how are people making a 1989 paycheck going to afford a house with a 2007 bloated price tag?

Unless the housing market rebound is relying on people not buying houses, I'm a little confused.

[lvdragonlady]

12:15 AM on 05/12/2011

Opportunity is knocking America, this is one bank we can bring down, if for no other reason then the fact that it thinks Americans are (()&&*^ enough to fall for their games, the 2nd time around.

[LogicalMathMan]

01:34 PM on 05/11/2011

Two huge acquisitions that really cost Bof A were the purchase of Merrill Lynch for $15billion without BofA geniuses knowing that most of their instruments were tied into faulty bundling of credit swaps and the Countrywide acquisition.

Here's are obvious reasons why the housing market will not rebound: 1) excess residential homes inventory/vacancies, 2) with almost 10% walking away from their homes, these people will not be able to purchase a home with a mortgage for at least 7 years, IF they are diligent about erasing their bad credit, 3) the inability of BofA to unload sick transactions in a tight money supply market, 4) less demand by foreign investors of instruments of US banks, 5) the manipulation of Chinese currency which can make the US dollar relatively weaker 6) the reluctance of foreign investors to fund US banks, 7) a burgeoning trade deficit, 8) a looming inflation.

Feel free to add you own criteria.

[jtabs]

11:01 AM on 05/11/2011

A rebound of the real estate market maybe but doubtful for housing, at least not single family housing.

[Peter007]

09:04 AM on 05/11/2011

A lot of the value in housing prices is dependent upon expectations.
In Miami Fla., sales have doubled and the bottom for values was last year. Values are rising there and when values begin to rise, people that have been waiting for the bottom, jump in quickly.

If its widely understood that the bottom of real estate values will be in 10 months, you'll find people jumping the gun and buying now, before they miss the boat.

[stape45]

06:06 AM on 05/11/2011

They may be betting even more, that it will flop.

[eddy joe]

06:01 AM on 05/11/2011

So someone is throwing the bank of america under the bus.

[RadicalAmerica]

12:04 AM on 05/14/2011

EXACTLY where they should be.

[MojoWorking]

03:06 AM on 05/11/2011

Housing market to rebound ... soon .... yeah good luck with that ...

[lostinit]

03:01 AM on 05/11/2011

It will. Get your RE license now. Take advantage while you can.

[Realtors Are Liars]

07:24 AM on 05/11/2011

More succinctly put:

"Get what you can get for your house today because it's going to be much much less tomorrow for many many years to come."

[iam99]

02:48 AM on 05/11/2011

I would trust these bankers as far as I can throw the moon. Doesn't everybody figure that if they buy RE that they only can 'own" their property until the banks sends out a foreclosure notice.
How many times, in how many ways, can people be toasted before they no longer will play the game? The historic systems that had been in place, and The People themselves are being destroyed.

[Peanut Santiago]

02:10 AM on 05/11/2011

Let's be realistic here.

And this has NOTHING to do with political party affiliation.

Ordinary Americans are hurting.

They are unemployed and underemployed.
Their wages are stagnant and (at times) decreasing.

They....graduating students carry a lot of debt and can't get the jobs to start paying it off.

They are losing benefits which means more money out of their pockets for things like medical treatment.

Their houses are losing value.
Buyers are staying on the sidelines, loans are harder to get even for qualified people, and there are too many short sales and foreclosed houses on the market.

Then there is inflation on necessities like food and fuel.
(You can't eat an I pod that has stayed the same price or gone down in price.)

Oh, and the politicians are threatening to cut medicare and social security to add to the distress.

The everyday American people are scared, angry, and feel hopeless at times.
They see everything they worked for (or hoped to work for) going down the drain.
Or they are barely hanging on to what they have.
-----------------------------------
Tell me, why does Bank of America think house prices (in almost all areas) will go up?

IMHO they are crazy (once again) to take such a risk.

[Siebenstein]

02:46 AM on 05/11/2011

You forgot to mention that this was the biggest theft in history, committet by the banks /Wall Street with the help of politicians, mostly right-wing politicians (not only). So, no, this is party affiliated, sorry. It mostly comes from the right.
Also, nothing is being done to stop the thieves from committing more theft with OUR money. They (BofA) are not crazy, they just try their boundaries and try it as long as Americand keep sitting on their arses and not run their doors in.

[mdsmith013]

05:44 AM on 05/11/2011

How is does your comment have nothing to do with political party affiliation other than that you said it doesn't?

!) Democrats believe in the study of Macroeconomics and believe the government can help reduce unemployment. Republicans do not. Democrats support increased wages for the middle class and have policy ideas that can do that (fiscal stimulus, collective bargaining, etc). Republicans don't even clearly seem to want middle class incomes to rise.

2) Democrats want to reduce students debt burden and recognize that universities are charging too much. Republicans think the free market does best in all things, so they don't believe the government can't or shouldn't help students financial situations.

3) Democrats support benefits and better standards of living and recognize the government can do something about it in a recession. Republicans think the free market does best and the government can't or shouldn't help that.

4) People don't have any money, Democrats think fiscal stimulus can help, Republicans support reducing government spending even when consumption and investment down (not because of crowding out) because they want smaller government no matter the human costs.

5) Inflation isn't a problem right now, but both parties are kinds of buying that nonsense right now so maybe that's not partisan. But the GOP is more just drowning out economic data analysis with ideology.

6) The GOP is threatenin­g to cut medicare and social security to add to the distress. Dems are not.

[Edy Kel]

12:26 AM on 05/11/2011

Thy can start with paying taxes gain, CEO pay-cuts, and paying higher taxes to offset all the damage they did in helping to instigating the whole financial mess that affected millions of people.

[Siebenstein]

02:47 AM on 05/11/2011

......and stop two unessecary wars.....small pocket change, you know.

[castlerider]

11:55 PM on 05/10/2011

Sure, after confiscating so many properties,it's predictable as hell that they're going to start saying "Happy days are here again!!!" so they can sell those properties.

Ha! I'll believe it when I see it.... Like when they make mortgages readily available a lot more then they are right now. They don't have to go back to the crazy unregulated days. just a little bit more available could easily be done without increasing much risk at all. This is what Obama should be endorsing, and pushing. Get that money into the economy, Now!!

[Siebenstein]

02:48 AM on 05/11/2011

Problem is they won't find enough buyers, and I wish they fall apart. Anybody who puts his/her money in one of those banks today needs his/her head examined.