B of A loses $498 million on home loans and insurance in first quarter

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In reporting a $4.2-billion first-quarter profit this morning, Bank of America Corp. said it lost about half a billion dollars on its home-loan and insurance business.

B of A funded about $85 billion in first mortgages during the quarter -- about three-quarters of which were refis.

The North Carolina bank has absorbed plenty of criticism over its purchase of No. 1 mortgage lender Countrywide Financial of Calabasas and brokerage powerhouse Merrill Lynch Co., both of which nearly collapsed from exposure to exotic mortgages and the securities carved out of them.

B of A said the $498-million first-quarter loss on home loans and insurance was down from a $732-million loss a year earlier.

Of the bank’s total of 382,000 home loans in the quarter, $16 billion was in mortgages made to 102,000 low- and moderate-income borrowers. More from the announcement:

To meet rising refinancing and first mortgage application volume, the company is in the process of adding approximately 5,000 positions in fulfillment. In addition, the company has more than 6,400 associates in place to address increasing needs from consumers for assistance with loan modifications.

To help homeowners avoid foreclosure, Bank of America modified nearly 119,000 home loans during the quarter.

Read the earnings report here.