1 Big Surprise about Bank of America Corp (BAC)

To get back to the main point, then, a full $9.5 billion of B of A’s $15.2 billion in nonperforming mortgages are more than 180 days past due, meaning the bank has already taken the loss of them. That leaves us with $5.7 billion in nonperforming loans that haven’t already been charged off. And to add one final twist, according to B of A, $3.1 billion of these are actually still being paid by the borrowers — they’re classified as nonaccrual, and thus nonperforming, simply for regulatory reasons. Once you remove this final chunk, in turn, we get $2.6 billion in mortgages that are noncurrent, nonperforming, and not already charged off. After applying the 55% loss severity rate quoted above, we get … drum roll … $1.4 billion.

So there you have it. While B of A has plenty of problems, as I covered in detail in this series, one of them is not a mountain of owned mortgages on its balance sheet.

The article 1 Big Surprise about B of A originally appeared on Fool.com and is written by John Maxfield.

John Maxfield owns shares of Bank of America. The Motley Fool owns shares of Bank of America and JPMorgan Chase.

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