[quote=ucodegen]….remember that BofA paid the like of $0.02 for $1.00 worth of SFR mortgages.. so guess how low the foreclosure price of the property could go before BofA really loses money? A discount of 50% on the price of the property will not bother BofA that much, since their price that they paid was an 80% discount…..[/quote]
Well, I own BoA shares, and I know that the C’wide and Merrill purchases destroyed value. I was aghast when I first heard the announcement that BoA was buying C’wide.
Where did you get the $0.02 per $1 figure from? Is that for serviced mtges? If so, the revenue is just the servicing fees, not the amount of the loan plus interest, less loan losses. The problem with C’wide is the loans they own, not the servicing portfolio. Loan losses will be huge, and will wipe out the net capital BoA got when they bought them. (Yes, BoA actually paid for C’wide.)
