If you want to find the most important bank in USA, go to Charlotte, N.C. to Bank of America, which posses the highest assets. A lot of people knows about Countrywide Financial - the organization that took a loan of around 4,1 billions US dollars, and finally caused for a mortgage crisis.

We have to underline, that this deal let the BofA have its own part in 25% of home loans in the United States. The transaction described above is only one example out of a number of cases, when financial institution wins substantial advantages after creating trouble loans. Such kind of loans are also called subprime loans, of course this situation attracted a lot of attention, all owners of trouble loans were investigated. The main source of financial resources for loans is the money saved on deposit accounts by clients. But Countrywide Financial acts in different way, it operates on Wall Street as a borrower, so it obtains amount of money enough to invest it in mortgages, and finally sell these loans on secondary market. These transactions are repeated again and again, which gives the possibility the parts get their profit. This cycle worked without problems until we faced the mortgage crisis. After the Countrywide Financial became the part of the Bank Of America, the latter received in its property over 5800 branches situated in 31 different states in US.

More over Bank of America unites 700 loan offices and 200 banking centers situated all over the United States of America. Taking into consideration that a number of borrowers loose their homes at the end, this acquisition is very profitable deal for Countrywide Financial executives. The next step of BofA will allow around 260 thousand borrowers with bed debts save their homes. it will happen owing to modifying more then 40 billion US dollars of mortgages. All this is planned to to be held during the next two years. A great amount of clients with problem loans leads to increase of Countrywide foreclosure homes number.

Post foreclosures (REO)

REO property or real estate owned property belongs to banks. How does it happen that banks own a real estate? Well, it is easy to understand: bank gives a loan, so mortgage appears, if client cant pay his dept and if there are no ways to avoid foreclosure, the home becomes the property of financial organization. It may seem that foreclosures can’t bring high profits as bank want to sell it offering the price which will at least cover the amount of the first loan. On the other hand, if you will be more attentive, you will see some ways to benefit greatly from buying a foreclosure house.

It may be the situation, when more then one loan is secured to the real estate; actually it happens quite often nowadays. In case second lender doesn’t make payments to the first lender and starts own foreclosure procedure, in this case the second lender is not part of foreclosure process any more. That is the main reason why plenty of second mortgages are valued around 20% less then the normal market price.

• Largest foreclosure lenders:
• FannieMae foreclosure properties
• Freddie Mac REO homes
• Countrywide foreclosed homes
• BofA Foreclosures
• Fifth Third Bank REO properties

Bank doesn’t benefit from being an owner of a house; it needs money to flow constantly to get higher net profit. More over keeping a foreclosure as an asset may cause additional expenses. That is why bank wants to sell this burden as soon as possible, and it is likely to accept even not high price, just to cover the dept.