Bank of America, the nation's largest second-lien lender, says it expects losses on its home equity portfolio to be higher than previous estimates. At a recent investors' conference, Liam McGee, president of the bank's global and small-business division, said losses on its second-lien (home equity) portfolio would be higher than an earlier estimate of 2.0%-2.5%. He cited ailing housing markets in California and Florida as being among the worst. According to the Alternative Products Quarterly Data Report, BoA was the largest second-lien lender in the fourth quarter, with originations of $18 billion. (Second-lien rankings for the first quarter will be ready shortly.) Speaking at the investors' conference, Mr. McGee also reported that the bank's purchase of Countrywide Financial Corp. is on track and is expected to close in the third quarter.
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Agency activity dropped off by 4% in September while non-qualified mortgage issuance was down 18% in the third quarter versus the prior period, BTIG said.
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Developments like the downward swing in total jobs reported Friday, inflation and AI have made nonbank employment more complex and volatile this year.
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Single-family mortgages originated with new scores have been put into private securitizations but these typically have been submitted alongside classic FICOs.
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The collaboration comes after HUD issued several other updates earlier this year aimed at increasing affordability through loosened homebuilding policy.
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Southeast impairments run 150 bps above other regions and alt-doc loans are up 200+ bps since 2025, while DSCR and full-doc improve. Time to review overlays.
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Federal Reserve Gov. Lisa Cook said Thursday that private credit does not seem to pose additional risks to the financial system at the moment, but added that more information about the opaque market is needed.
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