Bank of America is hiring 5,000 employees to handle rising demand for mortgage refinancings, the company said Monday in announcing a $4.2 billion first-quarter profit.
That’s up from $1.2 billion in the same quarter a year ago, and more than the Charlotte, N.C.-based bank made in all of 2008.
Bank of America is still struggling to digest its acquisitions of Countrywide Financial Corp. and Merrill Lynch, however. Provisions for credit losses hit $13.4 billion, up from $8.5 billion during the fourth quarter, and nonperforming assets ballooned from $18.2 billion the end of 2008 to $25.7 billion.
Net revenue in the home loans and insurance division nearly quadrupled, to $5.2 billion, largely because of the Countrywide acquisition and consumer demand for refinancing at lower interest rates, Bank of America said.
Bank of America said it funded $85.2 billion in residential mortgages during the first quarter — about 382,000 loans — but that three in four were for refinancings rather than purchase loans.
Bank of America said it modified nearly 119,000 home loans during the quarter, making progress toward meeting a goal set last year to modify over $100 billion in loans to help keep up to 630,000 borrowers out of foreclosure.
With its acquisition of Wachovia Corp., Wells Fargo can claim to be the nation’s biggest residential mortgage lender, originating more than 450,000 loans totaling upward of $100 billion during the first quarter. On April 9, Wells Fargo said it expected to post a record $3 billion profit during the quarter, sending stocks soaring (see story).
Shares of Wells Fargo, Bank of America and other financial sector companies were down sharply on Monday because of fears that first-quarter profits are unsustainable.
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