If we compare the assets of banks, then we can say, that the greatest bank is Bank of America. A lot of people have heard about Countrywide Financial - the organization that received a loan of around 4 billions dollars, and finally created a basics for a mortgage crisis.

Take into account, 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 thousands of cases, when bank wins huge advantages after creating trouble loans. Such kind of loans are also known as subprime loans, of course this situation attracted a lot of attention, all problem lenders were investigated. Normally as a source of money for mortgages banks use the money saved on deposit accounts by clients. But Countrywide Financial works according the different scheme, it takes loans on the Wall Street, so it receives amount of money enough to invest it in mortgages, and after all sell these loans on foreclosure market. These transactions are held again and again, which gives a chance the lenders and borrowers get their additional money. This scheme worked without problems until we faced the mortgage crisis. After becoming the owner of Countrywide Financial the Bank of America received in its property over 5800 branches located in 31 different states in US.

Also Bank of America posseses 700 loan offices and 200 banking centres located all over the United States of America. Taking into account that a number of borrowers loose their houses at the end, this acquisition is very successful deal for Countrywide Financial executives. The activity which BofA is planning to undertake now will allow around 260 thousand borrowers with problem loans save their real estate. it will happen owing to modifying more then 40 billion US dollars of mortgages. All this is supposed to to be realized during the upcoming two years. A great amount of clients with problem loans leads to increase of Countrywide foreclosure properties 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 foreclosures
• Freddie Mac foreclosed homes
• Contrywide foreclosures
• BofA Foreclosure homes

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.