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Bank of America Corp (BAC) and Dow 14,000: Then and Now

This is what may never be again
Speaking of mortgages and things resurgent, we’re currently in the nascent stage of a resurgent housing market. With Fed chairman Ben Bernanke’s push to boost demand for home-lending through his third round of quantitative easing, there’s a lot of money to be made in home lending, and B of A is missing out.

In the fourth quarter of 2012, mortgage loan originations for JPMorgan were $51.2 billion. Wells Fargo & Company (NYSE:WFC) originated $125 billion in mortgages in Q4 ; Wells is the country’s largest home lender, in fact. But B of A only originated $75.1 billion in home mortgages for all of 2012.

I can understand B of A being gun-shy of getting back into the home-lending game, but this isn’t the mid-2000s: So far as we know, subprime lending is not currently an issue. And so long as the bank is on top of its own lending practices, there is safe and easy money to be made in home lending right now, and into the foreseeable future. JPMorgan and Wells get this, and B of A needs to as well.

I’m still not convinced all the bank’s crisis-related chickens have come home to roost, but I do think B of A is slowly but surely being turned around, thanks in no small part to Moynihan’s strong, patient hand. Still, $12.17 — the bank’s current share price — is a far cry from that lovely pre-crisis price of $53.30. And even with a Dow at 14,000 or beyond, it still may never make it back to that — but $12.17 sure as heck beats $3.19.

The article B of A and Dow 14,000: Then and Now originally appeared on and is written by John Grgurich.

Fool contributor John Grgurich owns shares of JPMorgan Chase. Follow John’s dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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