Bank of America was the Brothel of Bad Mortgages
In a research note by Berstein Research, analysts wrote Bank of America (NYSE:BAC) had the highest exposure to bad mortgages during the housing boom. The bank sold about $2.1 trillion worth of mortgages to private investors and GSEs (Fannie Mae and Freddie Mac), leaving them a $10 billion exposure.
On a positive note, the analysts commented that Citigroup’s (NYSE:C) mortgage exposure may have been overestimated. The company is in position to absorb mortgage/litigation risks better than what’s priced into their stock and subsequently, its shares look more attractive to investors.
Bank of America’s (NYSE:BAC) stock is down 2.60% to $5.61 on the news. Shares are down 57.98% year to date. The stock has traded in a 52-week range between $5.13 and $15.31.