Top five biggest U.S. banks expected to see costs from mortgage, foreclosure crisis double to US$121B; Bank of America to be hardest-hit
September 16, 2011
– Costs from the U.S. mortgage and foreclosure crisis are expected to double to US$121 billion for the country’s top biggest banks, Bloomberg reported Sept. 16.
The banks have already been hit with a total of $65.7 billion in costs, with Bank of America Corp. accounting for about $39.1 billion. Second largest lender JPMorgan Chase & Co. had costs of $16.3 billion while the nation’s largest home lender Wells Fargo & Co. accounted for $5.09 billion.
According to earlier predictions, the lenders were not expected to suffer serious damage.
Paul Miller, an analyst at FBR Capital Markets & Co. had previously predicted costs between $54 billion and $106 billion, but he readjusted his expectations, saying they might be more than $121 billion., reported Bloomberg.
Miller expects the top three lenders along with Ally Financial Inc. will account for 60% of the new figure with Bank of America representing 33%.
A $196-billion suit by the Federal Housing Finance Agency’s against 17 banks and the continued rise in foreclosures may cause that figure to rise even more.
In August the U.S. sent 33% more default notices to homeowners than in July while total foreclosure filings rose 7%, according to a RealtyTrac Inc. report.
The primary source of this article is Bloomberg, New York, New York, on Sept. 16, 2011.