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Tuesday, February 28, 2012

Guess Obama won't like this: Buffett goes off his script

Warren Buffett, who controls the biggest shareholding of the No. 1 U.S. mortgage lender, said banks were victimized by some homeowners who refinanced their loans before getting evicted.

“Large numbers of people who have ‘lost’ their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost,” Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said Feb. 25 in his annual letter. “In these cases, the evicted homeowner was the winner, and the victim was the lender.”

Foreclosures have claimed about 5 million homes since the property market began its slide in 2006. That has saddled lenders like Bank of America Corp. with defaults, vacated properties and lawsuits.

Berkshire, whose stake in Wells Fargo & Co. (WFC), the largest U.S. mortgage lender, is valued at more than $11 billion, invested $5 billion in Bank of America last year. (Continues here)

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