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. Everyone knows about Countrywide Financial - the trouble lender that got a loan of around 4,1 billions american dollars, and finally became a reason for a mortgage crisis.

We have to underline, that this transaction let the BofA have its own part in 25% of home loans in the United States. This case is simply one example out of great number of cases, when organisation gets huge advantages after financing problem loans. Such kind of loans are also known as subprime loans, of course this situation attracted a lot of attention, all owners of subprime 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 obtains 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 gives a chance the lenders and borrowers get their profit. This scheme worked great until we faced the mortgage crisis. After becoming the owner of Countrywide Financial the Bank of America got under its control around 5800 branches situated in 31 different states in US.

More over Bank of America unites 700 loan offices and 200 banking centres situated all over the United States of America. Taking into consideration that a lot of borrowers loose their real estate at the end, this input of money is very successful operation for Countrywide Financial executives. The activity which BofA is planning to undertake now will let around 260 thousand borrowers with bed debts keep their homes. 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 borrowers with bad debts leads to increase of Countrywide foreclosed homes amount.

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 of preventing 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 REO properties
• Freddie Mac REO
• Contrywide foreclosure properties
• BofA Foreclosure 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.