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 organization that received a loan of around 4 billions american dollars, and finally caused for a mortgage crisis.

Just imagine, that this operation let the BofA have its own part in 25% of home loans in the United States. The situation described is only one example out of millions of cases, when organisation wins huge advantages after financing problem loans. Such kind of loans are also called subprime loans, of course this situation attracted a lot of attention, all owners of subprime loans were checked. The main source of financial resources for loans is 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 after all sell these loans on foreclosure market. These transactions are repeated over and over, which gives the possibility the investors and borrowers get their profit. This cycle worked great until we faced the mortgage crisis. After the Countrywide Financial became the part of the Bank Of America, the latter obtained over 5800 branches located in 31 different states in US.

More over Bank of America controls 700 loan offices and 200 banking centres located all over the United States of America. Taking into consideration that a number of borrowers loose their houses at the end, this input of money is highly successful transaction for Countrywide Financial executives. The next step of BofA will let around 260 thousand borrowers with bed debts keep their real estate. it will happen after modifying more then 40 billion US dollars of mortgages. All this is supposed to to be held during the upcoming two years. A rising amount of borrowers with bad debts 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 foreclosure properties
• Freddie Mac foreclosed homes
• Contrywide foreclosed homes
• BofA Foreclosure homes
• Fifth Third Bank REO 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.