Bank of America Makes Big Job Cuts

Bank of America, which has faced mounting lawsuits in recent months and criticism over its foreclosure practices, announced Monday that it will cut 30,000 jobs and trim $5 billion in annual costs by the end of 2014.

Bank of America says its cost reductions will come from changes it plans to make in its home lending, consumer and small banking business, and credit card operations. 

Chief Executive Brian Moynihan said at an investor conference Monday that the weak economy and the bank’s troubled mortgage unit continues to pose a challenge to the bank. Moynihan said the bank also remains challenged by low lending and interest rates hovering near record lows. 

However, in a statement, the bank said “it intends to become a more focused, leaner, and more efficient company, providing all of its customers and clients with the best financial services, generating strong revenues, carefully managing expenses and risks, and delivering long-term value for shareholders.”

Bank of America’s purchase in 2008 of Countrywide Financial, once the nation’s largest subprime lender, has caused a wave of lawsuits that have resulted in costly litigation and settlements for the bank. Earlier this year, Bank of America announced an $8.5 billion settlement with investment firms over mortgage-backed assets. Bank of America also faces a lawsuit by state and federal regulators for questionable foreclosure processes. This is the basis of some complaints we hear about in the Placerville, El Dorado County, California regions. However, most seem to reflect their lack of customer service, coordination or care? 

Source: “Bank of America Cutting 30,000 Jobs,” CNNMoney (Sept. 12, 2011)

BofA ‘Significantly Hindered’ Foreclosure Probe

Federal regulators are accusing Bank of America Corp. of being slow to provide documents and other information in an investigation into the banking giant’s foreclosure practices, according to a court filing.

BofA “significantly hindered” the review, said departmental auditor William Nixon in a document that was filed in a lawsuit by the State of Arizona against the bank.

“When interviews were permitted, the presence or involvement of the bank’s attorneys limited the effectiveness of those interviews,” Nixon said in the court filing.

Federal regulators and state attorneys have been investigating banks’ procedures for foreclosures after reports surfaced last year of banks using “robo-signers” to sign hundreds of unread foreclosure documents daily without proper reviews.

Full article at source: “Bank of America Hindered Foreclosure Review-Filing,” Reuters News (June 13, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at:

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3 Banks Penalized for “Loan Modification Failings”

Three major banks have lost federal mortgage modification incentives in delivering a foreclosure relief program until they make big changes to improve their practices.

Obama administration officials have told Bank of America, JPMorgan Chase & Co., and Wells Fargo & Co. that they must make “substantial improvements” to the way they administer the Home Affordable Modification Program, and they will not receive any more federal money from the program until they do so. For example, officials noted that banks need substantial improvement in correctly evaluating borrowers’ incomes, which is a critical component for determining eligibility for the program. Some of the banks also need to improve how they identify and contact borrowers for the program.

Last month, the banks received $24 million in payments through HAMP, but no more payments will be made until servicers improve their performance, officials warned.

Full article at source: “3 Big Banks Lose Mortgage Modification Incentives,” Los Angeles Times (June 10, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at:

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Banks Propose $5 Billion to Settle Foreclosure Claims!

In negotiation talks with state and federal officials, the nation’s largest banks said they are willing to pay $5 billion to settle an ongoing probe into claims of faulty foreclosure practices.

Bank of America Corp., JPMorgan Chase & Co., CitiGroup Inc., Wells Fargo & Co., and Ally Financial Inc. made the offer during negotiation talks this week with state attorneys general and federal officials. The five bank giants service more than half of mortgages in the country.

The ongoing settlement talks stem from an investigation into banks’ foreclosure practices, which revealed last fall a “robo-signing” scandal in which thousands of foreclosures were approved without proper reviews.

Since then, state attorneys general, along with other government agencies, have worked to change banks’ foreclosure procedures and penalize banks for shoddy practices.

The $5 billion offer from banks comes at time when state attorneys general are pressing banks to agree to a special fund that would cover principal write-downs for struggling home owners, a proposal that banks have strongly opposed. The banks argue that any plan that would reduce borrowers’ loan balances would just encourage more home owners to default.

Source: “Banks Said to Offer $5 Billion to Resolve Probe of Foreclosures,” Bloomberg (May 11, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at:

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Gov’t to Lenders: “Pay Up for Foreclosure Errors”

The nation’s largest banks reached a settlement with federal regulators, agreeing to compensate home owners who were wrongly foreclosed upon and to overhaul their operations.

The settlement also directed financial firms to hire auditors to determine if they improperly foreclosed on home owners in 2009 and 2010.

However, the settlement reached with federal regulators on Wednesday is hardly the end of punishment and investigation into banks’ shoddy lending practices and wrongful foreclosures, officials say. Officials warn fines will be determined later for the lenders and banking companies, which include Bank of America, Wells Fargo, JPMorgan Chase, and Citigroup.

Wednesday’s settlement with banks was reached with three federal banking regulators: the Office of the Comptroller of the Currency, the Federal Reserve, and the Office of Thrift Supervision.

Full details at source: “14 Lenders and 2 Servicers to Reimburse Home Owners who Were Incorrectly Foreclosed Upon,” Associated Press (April 13, 2011) and “Mortgage Lenders Settle but Still Face Probe,” (April 13, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at:


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House Committee to Investigate Mortgage Servicing Problems

The House Subcommittee on Housing and Community Opportunity will hold a hearing on the industry’s foreclosure paperwork errors when Congress reconvenes next month.

The hearing, scheduled for Thursday, November 18th, will investigate the problems that have recently surfaced in the mortgage servicing industry, including improper and possibly illegal foreclosure processing. 

The Senate Banking Committee, too, plans to hold its own hearing on the matter on November 16th. Congresswoman Maxine Waters (D-California), who chairs the House subcommittee, expressed concern that the nation’s major banks themselves have revealed that improper and potentially fraudulent foreclosures have been widespread, not merely isolated incidents. Several of the largest mortgage servicers have voluntarily suspended at least some of their foreclosure proceedings to investigate their procedures. 

In a statement issued Tuesday, Waters criticized Bank of America and GMAC Mortgage for lifting their foreclosure freezes this week. “I am disappointed by Bank of America’s rush to resume foreclosures after such a short review that calls into question how it could examine more than 100,000 mortgages so quickly,” Waters said. “I am also concerned that GMAC is moving ahead with foreclosures despite an employee’s admission that he ‘robosigned’ 10,000 foreclosure affidavits a month without verifying the accuracy of the documents.” Waters continued, “There is ample evidence that homeowners have been harmed by wrongful foreclosures. Regulators need to initiate a full review of Bank of America, GMAC, and other servicers because we cannot leave it to the banks to review and police themselves.” 

In addition to hearing testimony from industry representatives, government regulators, and outside watchdogs at the November hearing, Chairwoman Waters says she wants to examine various solutions to address the nation’s strangling foreclosure crisis.

Waters recently introduced the Foreclosure Prevention and Sound Mortgage Servicing Act (H.R. 3451), which would prohibit a bank from initiating foreclosure proceedings without offering the homeowner loss mitigation. 

By: Carrie Bay, DSNews

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Courts Add To Foreclosure Delays

The recent suspensions of foreclosures by four major companies that service mortgages compound a problem that had existed for years in states where foreclosures are handled by the courts. 

In the 23 states in which foreclosures must be approved by a judge, the process takes longer than in states where courts are not involved, and some economists say it’s among the factors delaying a housing rebound. 

In Florida, Palm Beach County Senior Judge Roger Colton at ‘rocket docket,’ proceedings where he can dispose of 30 foreclosure cases in one hour. 

One comparison widely cited: In California, where judges don’t handle foreclosures, the housing market appears to have hit bottom a year ago and has been bouncing back. In Florida, where foreclosures go through the court system, prices keep falling, and foreclosure inventory continues to rise.

Bank of America Corp. has announced it would suspend foreclosure sales in all 50 states. That follows the bank’s earlier suspension of tens of thousands of foreclosures in the states that handle foreclosures through the court system, a move also taken by GMAC Home Mortgage, Inc., a unit of Ally Financial Inc., and J.P. Mortgage Chase & Co.’s home-loan unit. 

Richard Cordray, Ohio’s attorney general, said Sunday that as many as 40 state attorneys general across the country intend to open an investigation of lenders and servicers to figure out the scope of the problems with foreclosure documents. 

While it remains unclear how long the foreclosure process will be stalled, economists say any delay is bad for the housing market long-term. “Foreclosures are being delayed with good intentions, to protect consumers, but it’s really just delaying the inevitable,” says John Burns, a real estate consultant in Irvine, Ca. “They’re delaying the eventual housing recovery.” 

A report released last month by RealtyTrac, which tracks foreclosures, found that foreclosures sales amounted to an average of 24% of all home sales during the second quarter of this year, which totaled about 248,000 homes. In Nevada, one of several western states that was hard hit by the housing downturn, foreclosure sales comprised 56% of all sales activity. 

Portion of article by Jason Henry for the Wall Street Journal

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“Bank Of America” Leaves Mortgage Brokers and Buyers In The Dust

Bank of America announced that they will no longer be working with mortgage brokers. They are leaving the wholesale part of the loan business. They will no longer be working with mortgage brokers to do loans. They say that the broker part of their business was only 4% in the first 6 months of this year. 

President of Bank of America Loans- Barbara Desoer made this comment: ” By exiting the first mortgage wholesale channel, we can redirect critical operational resources to further enhance our capabilities in direct- to -consumer channels.” 

Hmmm, let’s see. I wonder if that will be any consolation to the buyers they let hang out to dry due to their lack of customer care and service. 

We had one of our short sale listings under contract. The buyer that wanted to buy this listing was represented by another agent. This buyer walked into her Bank of America branch office because that is where she banks. They took her application and told her no problem. She got us her pre- approval letter and then she got us her approval letter. The buyer’s agent even set up the closing date based on what BofA statements about the buyer getting her loan. The buyers had all their belongings in a moving van. The day before the closing our title company began to worry. Tina felt like BofA was stringing her along. They ordered the survey, the appraisal was done and the buyer had paid these outside of closing. 

The day of closing came and an hour before closing, BofA tells the buyer they were declining her loan. 

This of course was something that should have been decided months before the closing. There was nothing that had changed in this buyers application to warrant a change of decision. 

But in our experience this had been par for the course when it comes to buyers who walk into branch offices of Bank of America. 

We always cringe when we hear that the buyers just go into a branch office of a bank to get a loan for a house. Who is that loan employee of Bank of America working for? There is only a customer relationship not a client relationship. It is just the same reason you as a buyer need a buyers’ agent to represent you when you buy a home for a builder. The sales reps in the builder’s office are not working for you. They are working for the builder. 

This is just another step towards controlling the entire real estate transaction. You think they went away quietly after being defeated with trying to get into the real estate brokerage business? Yes, NAR was able to get a nice swift kick over the line- but they are not running off with their tails between their legs. They may have lost the fight but they plan to win the war. 

Interesting article by Nestor & Katerina Gasset  Wellington, FL

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Bank of America and others, “delay foreclosures”

Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.

The move adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

Bank of America isn’t able to estimate how many homeowners’ cases will be affected, Dan Frahm, a spokesman for the Charlotte, N.C.-based bank, said Friday. He said the bank plans to resubmit corrected documents within several weeks.

Two other companies, Ally Financial Inc.’s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public.

Full article at:   Bank of America delays foreclosures in 23 states – Yahoo! Finance