Barclays Sees $2 Billion of Bad Loans at Bank of America

Noting that Bank of America’s home-equity mortgage portfolio exceeds its stock market value, Bloomberg reports that BofA will probably will say about $2 billion of junior loans are bad assets Thursday even as some borrowers are still paying on time.

Citing Barclays Capital estimations of what the bank will most likely report for its first-quarter results, the news service adds the announcement will follow recent decisions by JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup to reclassify $4.1 billion of junior liens as nonperforming.

“Regulators are pressing for the change on concern that falling home prices have wiped out collateral on many second mortgages, leaving them as unsecured debt,” Bloomberg writes. “About 20% of the nation’s $845 billion of home-equity loans exceed the value of the properties when combined with primary mortgages, according to CoreLogic Inc., and about 36% of Bank of America’s were at least partly ‘underwater’ at the end of last year.”