Bad Mortgages Still Haunt Bank of America

Under Chief Executive Officer Brian T. Moynihan, Bank of America is spending billions of dollars to deal with the aftermath of the housing bust, reaching settlements with mortgage bond investors and insurers and setting aside funds for future claims. The cleanup effort hasn’t yet convinced analysts and investors that the bank is ready to put the mortgage mess behind it.

Charlotte (N.C.)-based Bank of America, the nation’s largest bank by assets, announced a quarterly loss of $8.83 billion on July 19, the biggest in its history. The mortgage unit’s loss widened to $14.5 billion, from $1.5 billion a year earlier. Moynihan has called his company a “tale of two cities,” because its non-mortgage operations are making money. Global commercial banking reported the highest net income since the second quarter of 2009, according to the bank.