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. Almost everybody knows about Countrywide Financial - the institution that received a loan of around 4,1 billions USD, and finally became a reason for a mortgage crisis.

It has to be stressed out, that this transaction 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 millions of cases, when organization wins huge advantages after dealing with trouble lenders. Such kind of loans are also called subprime loans, of course this situation attracted a lot of attention, all owners of trouble loans were checked. Normally as a source of money for mortgages banks use the money saved on deposit accounts by clients. But Countrywide Financial has another scheme for its operations, it operates on Wall Street as a borrower, so it gets amount of money enough to invest it in mortgages, and finally sell these loans on mortgage market. These transactions are held again and again, which enables the parts get their additional money. This scheme worked great until we faced the mortgage crisis. After becoming the owner of Countrywide Financial the Bank of America obtained around 5800 branches situated in 31 different states in US.

Also Bank of America controls 700 loan offices and 200 banking centers situated all over the United States of America. Taking into account that a lot of borrowers loose their real estate at the end, this input of money is very successful deal for Countrywide Financial executives. The activity which BofA is planning to undertake now will enable around 260 thousand borrowers with problem loans keep their real estate. it will happen after modifying more then 40 billion US dollars of mortgages. All this is supposed to happen during the following two years. A number of problem borrowers results into increase of Countrywide foreclosed 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 stop foreclosure, the house 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 foreclosures
• Freddie Mac REO
• Countrywide REO
• BofA Foreclosure properties
• Fifth Third Bank REOs

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.