Bank of America's mortgage banking business lost money for a second straight quarter, dropping $1.1 billion on legal fees, fines and other "loss-mitigation expenses," the bank said Tuesday.
The bank's mortgage unit, called consumer real estate services, posted $2.82 billion in revenues. In the second quarter, it lost $13.2 billion on revenues of $1.71 billion in the second quarter.
Raymond James analyst Anthony Polini had predicted a "likely return to profitability" for the unit in a report he published earlier this month. Revenues, however, were slightly higher than the $2.75 billion he had projected. Still, they were down significantly from $3.61 billion a year ago as the bank cited various factors including the loss of revenues following the sale of an insurance unit in the second quarter.
Bank of America attributed the mortgage unit's $3.85 billion expense tab to "higher default-related and other loss mitigation expenses, mortgage-related assessments and waivers costs, which include costs related to foreclosure delays and other out-of-pocket costs that the company does not expect to recover, as well as higher litigation expense."
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