Like Citigroup's (C) dismal earnings and chief executive Vikram Pandit's exit? You're going to love Bank of America's (BAC) third-quarter numbers.

Any optimism JPMorgan Chase (JPM) and Wells Fargo (WFC) gave banking investors Friday after reporting stellar profits and a surge in mortgage refinancing is being tempered by Citigroup's near-ignorance of the housing sector and Bank of America's wonky books. Analysts speaking to Reuters projected a net loss of $94.58 million for Bank of America, or 7 cents a share, on $21.89 billion in revenue. Analysts at Zacks were less kind, dropping Bank of America's earnings estimate from 13 cents a share to 0 cents. That's a 100% drop from 28 cents per share a year ago.

The fallout from the bank's Merrill Lynch purchase four years ago and a legal mess surrounding the mortgage underwriting practices of Bank of America's other 2009 acquisition, Countrywide Financial Services, are creating pressure that the bank's bottom line can barely withstand.

The latter issue affected Morgan Stanley (MS) analysts' decision to cut their earnings estimate for Bank of America in early October. Low interest rates are already squeezing the bank's margins on loans, but scrutiny of its home lending and lawsuits against Countrywide are stifling loan volume that helps the banks competitors overcome those tiny rates.

Bank of America, like other banks, used funds from the Federal Reserve to cover bad loans and bolster its numbers. Unfortunately for Bank of America, Wall Street Journal analysts say 46% of the bank's profits in the last four quarters came from Uncle Sam's handouts.

That puts Bank of America in a tough enough spot without another $1.6 billion to $1.9 billion charge against its earnings. But that's the hit Bank of America's going to have to take this quarter after agreeing to pay $2.4 billion to settle a shareholder lawsuit last month. The class-action suit was filed in 2009 and alleged that Bank of America misled investors about Merrill Lynch's financial well-being when it purchased the brokerage in 2009 for roughly $50 billion, or 70% more than its last share price.

Despite the overwhelming odds against it, Bank of America could still buck expectations with some help from the housing market. Freddie Mac's interest rates for 30-year fixed rate mortgages are still hovering around 3.4% and prompting a stream of refinancing and home sales for those fortunate enough to secure credit.

Existing home sales jumped 7.8% in August from the same time last year, while the national median home price has increased for six straight months to $187,000, according to the National Association of Realtors. That's 9.5% higher than it was during the same period in 2011 and supported by the S&P/Case-Shiller index of home values in 20 cities, which climbed 1.2% in July from the same time last year. That was the index's biggest 12-month jump since August 2010.

If that potential housing comeback helps mortgage holders and homebuyers look past Countrywide and consider Bank of America, it could help salvage the quarter and the bank's numbers going forward. Barring that, it's looking bleak for BAC.

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