BoA Hammered by GSE Investments, Mortgages

Bank of America, which saw its credit losses more than double to $6.45 billion in the third quarter, is blaming the carnage on delinquent consumer loans, including home mortgages -- but also lines of credit it extended to homebuilders. The bank -- whose results now include the Countrywide Home Loans franchise -- also wrote down the value of its Fannie Mae and Freddie Mac preferred stock by $320 million. It now holds $13.36 billion in nonperforming loans, a stunning 300% increase over the past 12 months. (It's believed that part of the increase is attributable to the whole-loan portfolio it inherited when it bought Countrywide.) BoA said it modified 73,000 mortgages for customers during the quarter -- compared with 14,000 in the same period a year ago. Despite the monumental charges, the bank earned $1.18 billion in the third quarter, including $259 million in "operating" earnings from Countrywide.