BoA, Bear Taking B&C CDO Hits

Bank of America -- the nation's second-largest commercial bank -- says it will take a $3 billion writedown to reflect a decline in the value of mortgage securities on its books.Shortly after BoA revealed the charge, Bear Stearns & Co. said it would take a $1.2 billion writedown tied to the declining value of subprime and assets related to collateralized debt obligations. Both announcements came as executives from the two companies gave further details about their third-quarter performance. To date, banks, thrifts and Wall Street firms have taken close to $40 billion in writedowns tied to CDOs and subprime-related investments. Over the past seven years, Bear has been a major buyer and securitizer of subprime loans. BoA's role in funding the B&C market is less clear, though it was an investor in certain CDOs that contained subprime tranches.