chtrplyr

Another Leg Down for Financials Is Coming

Author forgets some crucial facts...


BoFA/CFC Option Arms Prime Loan exposure

$25B total Option ARM prime loans
$17B covered by supplemental mortgage insurance

Borrowers credit scores still good -> Prime Loans
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Average original FICO score 715
Average refreshed FICO score 680

88% current in payments and in good standing.

Reset schedule:
2009 $0.2B
2010 $3.8B
2011 $6.9B
Thereafter $2.4B
Loans assumed to repay before recast $9.6B

Current refreshed LTV with provisioning = 70

30% down (positive equity)

Housing bill to aid $300 billion in mortgages...
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Loss severity will be minimal to BofA related to Option Arm's exposure given the current provisioning.


"CLTV computed off remaining balances. If computed from values after purchase accounting adjustments the average CLTV percentage for the portfolio would be in the low 70's."

Countrywide: Potential Short Squeeze in the Offing

CFC shorts would have to be committing financial suicide to hold a position through the merger.

BofA had $15B current provisions plus $13B positive net equity in CFC plus potential $7B reserves this quarter for $35 Billion total.

All the while remaining profitable.

That will more than cover the balance needed to cover losses even in poor economic conditions the next few years.

With the housing bill they will only have about a quarter of those losses and will book write ups.

This is a negativity and oil bubble that is going to burst. BofA will help that happen after they book CFC as the lower the BofA price right now the lower they book for CFC for.

Shorting CFC at this level is about the dumbest move possible.

BofA + Countrywide: Can Ken Lewis Rescue the Kobayashi Maru?

Hello??? The closing is July 1st... In like 11 days... Where have you been??? You were wrong - give it up... You didn't have a clue about the terms of the deal the whole time.

Try some research....