The average rate in US home sales has dropped by a whopping 17.3% from the same month a year ago.But that hasn't stopped the number of people who are on a mortgage rising.In the US, home buyers now account for nearly half of all new home sales, up from 44% in January.The number of homes sold has also increased by a staggering 9.3%.In Australia, home sales have jumped by 8.5% from January.That's a ...
Bank of American (BAC) announced on Tuesday it has cut $2.7bn in mortgage-backed securities in the US due to concerns about the mortgage crisis, a sign the bank is increasingly concerned about its own balance sheet.
The bank cut the amount of debt it has underwritten to $3.5bn, bringing its total to $4.1bn, according to the statement.
The company also reduced its total loan-to-value ratio to 14.9%, down from 18.7% before the crisis, from the current 20.5%.
The company said the new policy was to help reduce risk and support the mortgage market in a “challenging market”.
The move comes after US regulators said they are considering a range of measures to bolster the financial health of the mortgage industry.BAC said it had a mortgage-focused, diversified business that provides loans and other services to small and mid-sized businesses, and to consumers.
It said it was “currently focused on a portfolio of investments that reflect the broad range of asset classes and types in the market”.
“As a result of these factors, we are reducing our overall balance sheet in the first quarter of 2017 by approximately $1.7 billion,” it said.
“We are also reducing our total leverage in the portfolio.”
The bank has been struggling to maintain its market share and profits as its US mortgage business has suffered from the housing market’s collapse and a downturn in investor demand.
Bac said it would not be commenting on its balance sheet for a week and had announced that the company was cutting more than 3,000 jobs.
“These changes were designed to reduce risk by removing a range, as well as provide flexibility to maintain profitability in the current environment,” it added.
The mortgage-securities market has been a major battleground in the recent mortgage crisis and in the fight against capital controls imposed by the European Union.