Tag Archives: Bank of America

New York City Comptroller John Liu has announced a victory for the members of the New York City Pension Funds who have long been calling for banks to conduct an independent audit of their mortgage foreclosure practices. The NYC Pension Funds requested an audit of the banks' practices in November and again in January to no avail, but the Securities and Exchange Commission (SEC) has ruled that the banks must put the group's request on the ballot at their annual shareholder meetings this spring.

In a partnership with the city of Detroit, Bank of America will open two customer assistance centers in the area to provide homeowners at risk of default or foreclosure with counseling and on-site decision making for mortgage modification programs or other payment assistance. The bank also plans to donate and refurbish 10 vacant homes for the city's ""Project 14"" program, and will work with the city to identify up to 100 low-value and vacant properties for demolition.

An Internet hacker group, going by the name Anonymous, claims to have proof that Bank of America committed mortgage fraud by ""knowingly hiding foreclosure info from federal auditors."" The group has obtained a slew of inter-departmental emails from a former employee of Balboa Insurance, a BofA subsidiary that the company sold last month. The whistleblower says he was instructed to remove document tracking numbers so supporting paperwork could not be matched to the corresponding loans. The bank called the ""extravagant assertions"" untrue.

Senators and banks across the country are joining forces in order to provide mortgage protection for members of the military. After reports that some members of the military and their families are struggling to remain in their homes, senators announced an act to protect servicemembers from abuses. In a similar effort, two of the top servicers have announced plans to help protect members of the military from foreclosure and high credit costs.

As predicted following the recent settlement proposal from state attorneys general and several federal agencies, servicers are not reacting with enthusiasm to the terms offered. One of the biggest conflicts in coming to an agreement is the proposed punishments servicers will have to face as consequences for their role in last year's robo-signing mess. Though nothing has been confirmed, hefty fines and/or principal reductions are projected to be in development. The reaction from banks and other industry participants has been less than receptive.

Bank of America said Tuesday that it is stepping up efforts to help distressed homeowners before they fall into foreclosure, with plans to double its borrower outreach staff in 2011, open new regional homeowner assistance centers, and increase collaboration with nonprofit housing counselors. But company officials warned shareholders that same morning that BofA's $1 trillion portfolio of problem assets -- loans that are already delinquent and those risky home lending products that the company has taken off the shelf -- will take three years to work through.

Bank of America is the first major mortgage servicer to leverage the federal government's Hardest Hit Fund to begin pilot programs of principal reductions for Arizona customers who owe more on their mortgages than their properties are worth. Through the Arizona pilot, BofA customers experiencing financial hardship may be eligible to have the amount owed on their mortgages reduced through matching contributions from the state and participating mortgage investors.

More legal woes have developed for Bank of America, as some of its mortgage investors brought a lawsuit against the lender in an attempt to force the bank to buy back bad loans. The original balance of securitized loans involved in the case was $2.8 billion, and the plaintiffs claim their trustee ""unreasonably failed"" to sue BofA. Another group of investors, which is engaged in talks with the bank in hopes of avoiding a legal battle in court, has nearly doubled the amount of allegedly faulty loans it wants Bank of America to repurchase.

Regulators and attorneys general say their investigations of servicing practices have uncovered critical deficiencies and shortcomings that have resulted in violations of foreclosure laws. They've made it clear that mortgage servicers will be required to make operational changes and will be hit with sanctions and penalties. It's been reported that the 14 servicers subject to the investigations will, as a group, face a hefty $20 billion in fines, but there is dissension even among the government agencies involved over the amount. Negotiations are ongoing.

When evidence surfaced last fall of flawed foreclosure documentation and robo-signers within some of the nation's largest servicing shops, federal regulators launched an investigation into the foreclosure and servicing practices of 14 companies. Officials say they've uncovered ""critical deficiencies and shortcomings"" and will be enforcing sanctions and penalties against servicers and developing a set of national mortgage servicing standards for the industry.