Bank Of Americas Campaign To Rid Bad Mortgages

Bank of America Gets Serious About Bad Mortgage Clean Up

The announcement of a veteran mortgage expert to head the Legacy Asset Servicing unit to take care of bad mortgages and foreclosures has lent strength to Bank of America’s ongoing battle in this area. Terry Laughlin, who amply demonstrated his expertise in his earlier stint with OneWest Bank, will head this new division and hopefully find more success in keeping the bank’s subprime mortgages within control.

Ever since it acquired Countrywide Financial Corp. in 2008, Bank of America has been hard pressed to contain the damages the new company brought into the fold in the form of bad mortgages. Already, BofA has invested billions in settling claims in this respect. Recent months witnessed a 50 million dollar spending towards the legal costs for Angelo R Mozilo, erstwhile Chairman and CEO of Countrywide.

Needless to say, investors have been apprehensive about how these costs will impact the bottom line of BofA. Many fear that as more bills continue to pile up in the coming months the bank may start to show some cracks.

Statistics show that there is good reason for such fears. In September 2010, Wells Fargo reports showed that upwards of 13% of the mortgages attributable to Countrywide payments were either late or foreclosure proceedings had already been initiated on them. BofA has also failed to make the best use of loan modifications under the Making Homes Affordable program introduced by Obama to shore up housing.
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Mixed Reaction to Bank of America’s Debt Reduction Offer

Bank of America announced on Wednesday that it would start offering debt reduction for homeowners who have an underwater mortgage. However, the offer has got a mixed reaction from industry analysts.

Bank of America has said that it would reach out to homeowners who are struggling to keep up with their mortgage payments and are likely to see a foreclosure of their property if no help is offered. The offer would be valid only when the mortgage balance exceeds the value of the property by at least 20%. The bank would choose about 45,000 homeowners to whom it would extend the offer of reducing their debt by a maximum of 30% in the next few years. [Read more…]

Bank of America Announces Loan Forgiveness Plan

Bank of America has announced that it will start forgiving some portion of home loans of borrowers who have underwater mortgages. The company said that the scheme would allow borrowers to save their home from going into foreclosure. [Read more…]

Debit Card Overdraft Fees for Bank of America Accounts Eliminated

You will no longer be able to spend what you don’t have in your Bank of America account. The surprise overdrafts and the subsequent hefty fees will soon become a thing of the past over with your Bank of America debit card point of purchase transactions. Bank of America has announced elimination of overdraft fees on such debit transactions, and this will come in effect from June for new accounts and from August for existing accounts. [Read more…]

Federal Reserves Role in Banking

In the wake of the financial crisis, the Obama administration had promised sweeping reforms that would prevent a similar crisis in future. One of the key areas of concern was supervision of banks, and the role that the Federal Reserve should play in that. But even after months of bickering on the issue, no clear solution seems to be in sight on which any kind of political consensus can be achieved. [Read more…]