Has Bank of America hit bottom?
The troubled financial institution is slowly crawling out of the hole it dug for itself.
According to Reuters, the Charlotte, N.C. company is considering unloading additional assets to comply with new capital rules. That's not surprising, given that the company has been selling everything -- $50 billion since 2010 -- that wasn't nailed down, including its stake in the largest Pizza Hut franchisee and the China Construction Bank.
Regulators "are trying to have us have more capital, more liquidity, so in a time of crisis, we can be there to support the economy and not have to shrink and retrench," CEO Brian Moynihan recently told the Boston Globe."We’re all for that."
As if he has any choice.
Bank of America is lagging competitors in efforts to comply with the Basel III rules that go into effect in 2019. As Reuters notes, most large banks expect to comply with the standards sooner than that, which will only intensify the pressure on Moynihan. Compliance could cost as much as $45 billion, said an analyst quoted by the news service.
That means Bank of America will need to sell more assets including some, if not all, of what it acquired from Merrill Lynch in 2009 for $50 billion -- a buy the Wall Street Journal dubbed "a deal from hell."
Bank of America, though still troubled, is scratching its way out of the hole it dug for itself. The company recently agreed to a $335 million settlement with the U.S. Department of Justice over charges of discrimination at its Countrywide mortgage business. The company will save money through its planned layoffs of 30,000 over the next decade. As it disposes of assets under its Project New BAC, that level of layoffs may not be necessary.
Wall Street analysts have not lost all hope in the stock either. Their average price target is $9.60, well above the $5.60 where it recently traded.
Warren Buffett, history's greatest investor, invested $5 billion in the bank this summer. Though Buffett's investment is underwater, Buffett can demand payment at any time and is guaranteed a 5% premium. Buffett has made his fortune is finding value in stocks that other people miss.
--Jonathan Berr does not own shares of the listed stocks.
BOA are true scumbags. Three years ago I applied and was approved for a modified mortgage with them only to find out 6 months after I had been paying the new modified mortgage that they were reneging on their own contract. I continued to pay the modified mortgage for two years while I sued them. They ruined my credit and reported that I didn't pay my mortgage in over two years and I lost every credit card I possessed. BOA did everything imaginable in court to get my modified mortgage thrown out and defied the judge time after time. It became a joke to the point the judge was going to sanction BOA for their sheer disregard for the court. When it became apparent that they weren't going to win after they spent well over $100,000 to try and not honor my modified mortgage, one day they called up my attorney and wanted to settle. After three years of fighting with them and they screwing me over, in less than three days they agreed to honor my modified mortgage, fix my credit that they ruined and pay over $10,000 to my attorney for his time. It was hell and I was very fortunate to have an attorney do this at no cost to me otherwise I would have never been able to outwait them and win my case. They are truly slimy and dishonest and I'd recommend that no one ever do business with BOA unless they want to deal with the devil.
And this is why the stock market does not work for the bulk of investors. Buffett gets to keep the $ he sunk into BofA regardless.
Though Buffett's investment is underwater, Buffett can demand payment at any time and is guaranteed a 5% premium.Now if the stock market can guarantee me the same, I will actually consider investing for the first time in my life.
Our Countrywide (now Bank of America) mortgage was sold by B of A a month ago to another company. Since this property is underwater by over $90,000, we are wondering what the new company paid for what is now this piece of junk--are they "bundling" again, just like they did in the first place and got into trouble?
We assume B of A gets to write off the difference (?) and the new company can just pray we continue to make our payments. If not, they will be asking for a bailour down the line. How do we get them to stop this stuff?
My house was also sold to BOA by Taylor Bean and Whitaker. I refinanced it though a credit union and sent my payoff to BOA electronically, and they sent the payoff money to some company I never heard of and then have been calling me and sending foreclosure notices. I have called and wasted hours of my time talking to people and managers who have no idea what they are doing. Over a month of phone calls and the problem still exist. I think what they are doing is fraud. Trying to get money from me for their mistakes. Any comments?
We bought and paid off the land then built our humble, three bedroom, ranch style home twelve years ago with hard work and ethics. BOA acquired our home from Wilshire and modification in place due to my husbands reduction of income from loss of hours in manufacturing industry. We have no credit cards and paid our modification agreement according to terms then at end of agreement were told by BOA they don't have to honor modification and put us in foreclosure. My question is how is this our fault and how is this ethical for BOA to do? It is not! Hire an attorney to pursue the American dream to own your home and fight for rights of home ownership! BOA is the most unethical bank and have put us in hell for two years! I have went through their hoops, affordable housing, Housing of Urban development, and all the other programs they have offered to finally at the end have them screw us because they don't have to honor a contract. I'm going to keep fighting and piece of advice. I made detailed notes of every conversation and documents back and forth with BOA and this is proof to prove the unethical business practices that BOA is doing to take people's homes!! Those who are struggling with BOA, I wish you courage and strength. Don't give up and if need be contact your state's attorney general, and the president of BOA to have your voice heard!
I had second loan with BofA. Like many others, I worked a second job to pay it off early. Even though I was two months ahead is payments, when I paid it off, they still wanted to charge me more interested.
They are a rip off and have gotten away with robbery for so long.
Customer service is next to nothing, a lot of their offices in Washington DC were dirty and
they could care less what kind of service you received.
As life goes on, we are all having to face the reality of the times, even big banks.
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The stock pulled back big Wednesday in the face of some hefty costs coming in 2014. Is this a market mistake from a long-term perspective?
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