Tag Archives: Bank of America/Countrywide

California's attorney general says the $6.5 million settlement from two former Countrywide executives will be used to establish a fund to help foreclosed homeowners. The settlement comes from a litigation that began more than two years ago against Angelo Mozilo and David Sambol. According to the lawsuit, Countrywide lured buyers with low teaser rates and failed to inform them of the downsides of adjustable-rate loans. The suit alleged that Mozilo and Sambol knew of these practices and did nothing to stop them.

Bank of America has agreed to sell the lender-placed and voluntary property and casualty insurance assets and liabilities of Balboa Insurance Company to QBE Insurance Group of Australia. BofA inherited Balboa Insurance when it purchased Countrywide Financial Corp. Bank of America and its affiliates are expected to receive an upfront cash payment of approximately $700 million for the deal with QBE, as well as additional future payments.

Recent data from Barclays Capital examines the ramifications of the fourth quarter foreclosure debacles on REO roll rates. Data released Friday shows the foreclosure-to-REO rate dropped 57 percent in judicial states the last few months of 2010, and dropped 42 percent in the non-judicial states. In New York, the roll rate ground to a near stop, dropping a whopping 91 percent in December when compared to the rate from January to October 2010.

Lenders across the country are facing demands from mortgage investors to buy back faulty loans. Analysts praised Bank of America's settlement with the GSEs earlier the month for setting a precedent that other banks could follow to reconcile with investors, but some community lenders are already ahead of the game. StellarOne Corporation in Virginia says it has reached an agreement with one of its primary mortgage investors to resolve repurchase and indemnification claims to the tune of $1.45 million.

Fannie Mae and Freddie Mac have reached an agreement with another lender to cover repurchase claims from alleged faulty underwriting standards in origination. Bank of America announced Monday that it paid a nearly $3 billion settlement to Fannie Mae and Freddie Mac on the last day of 2010 to cover repurchase claims from the two GSEs. According to BofA, the settlement resolves ""substantial legacy issues"" in the best interest of its shareholders, and the company says it is committed to putting such issues in its rearview mirror.

Arizona Attorney General Terry Goddard has filed a lawsuit against Bank of America for alleged fraudulent acts committed after a March 2009 lawsuit. Last spring, BofA agreed to develop a modification program for customers in the state to resolve Goddard's allegations that Countrywide had engaged in fraud in originating and marketing mortgage loans. Since then, Goddard says BofA has violated the provisions by failing to make timely decisions on mod requests and proceeding with foreclosures when modifications were pending.

The time mortgage loan servicers take to resolve delinquent loans through modification or foreclosure varies widely. According to an analysis by Moody's Investors Service, Bank of America has demonstrated the weakest performance measured both by its speed in resolving the status of delinquent loans and by its proportion of delinquent loans that have yet to be resolved. The ratings agency found that GMAC Mortgage, on the other hand, has generally performed better than its peers.

The Securities and Exchange Commission (SEC) is putting mortgage lenders on alert regarding disclosures about potential losses from foreclosure paperwork defects and loans they may be forced to buy back from investors. In a letter sent to the chief financial officers of publicly traded banking companies, the federal agency reminded lenders that they are obligated to relay to their investors any known trends, commitments or uncertainties that they expect could have an ""unfavorable impact"" on the company's financial results.

The co-founder of what was once the largest, most lucrative subprime lender in the country has agreed to pay a total of $67.5 million to settle allegations of fraud. Former Countrywide chief Angelo Mozilo will pay the SEC a $22.5 million penalty to settle charges that he misled investors about the risk associated with Countrywide's business. Mozilo will also pay $45 million to settle insider trading charges. He has been permanently barred from serving as an officer of a publicly traded company.

A New York judge threw out a case against Countrywide Financial by investors who wanted the company to buy back mortgages that it had reduced payments for. Investors claimed it is unfair for them to have to absorb the cost of modified loans, and that Countrywide was required under contract to buy back any mortgages that it modified. In 2008, Bank of America agreed to an $8.4 billion settlement with attorneys general from several states regarding predatory lending charges against Countrywide.