Bank of America's residential mortgage division posted a net profit of $2.3 billion in the fourth quarter, but for the full year the unit bled almost $8.2 billion of red ink, according to earnings figures released Thursday morning.
The bank saw its residential fundings plunge to just $18 billion in 4Q, a 30% decline from 3Q. All of its peers, including Wells Fargo, booked stellar production gains.
B of A is in the final throes of closing its correspondent unit, leaving it in just one production channel: retail.
The nation's largest bank also revealed that over the past year it booked an eye popping amount of mortgage-related charges – almost $30 billion worth, the largest item being a $15.6 billion set aside for “representations and warranties.” Other charges include non-interest expense ($7.3 billion) on its “legacy” servicing portfolio (a code phrase for Countrywide Financial Corp.) and a $6.3 billion set aside for mortgage-related litigation.
B of A will be a party to the pending 'robosigning' settlement with the state attorneys general.
Meanwhile, the megabank continues to see the asset value of its mortgage servicing rights decline along with its housing receivables portfolio.
At yearend B of A serviced $1.7 trillion of home mortgages compared to $1.9 trillion at Sept. 30, and $2 trillion a year ago.
It values its MSRs at just $7.4 billion compared to $14.9 billion at Dec. 31, 2010.
The entire bank earned $2 billion in 4Q compared to a $1.2 billion loss in the fourth quarter of 2010.
