Tag Archives: Bank of America

The Federal Housing Finance Agency (FHFA) has signed off on several headline-grabbing arrangements between major lenders and the GSEs to reconcile loan repurchase claims. The results of an investigation released this week, however, indicate approval was made in haste. In response, FHFA has put the brakes on any future repurchase settlements pending further examination of the process in place to assess the true cost of such deals for taxpayer-funded Fannie Mae and Freddie Mac.

The three major banks that received downgrades from Moody's this week responded with assertions of their value. Bank of America's and Wells Fargo's long-term credit ratings were downgraded, while Citigroup was hit with a downgrade of its short-term credit rating. Moody's says the downgrades stem from its belief the government is more likely now than during the financial crisis to allow a large bank to fail. The banks say that assessment is more a reflection on systemic support than their own liquidity profiles.

Rep. Darrell Issa of California has sent a letter to the Federal Housing Finance Agency (FHFA) expressing his concerns and requesting information about an alleged deal between Fannie Mae and Bank of America. Issa references an August 10th report detailing a deal between Fannie and the bank in which the GSE reportedly purchased the mortgage servicing rights of 400,000 troubled loans for $500 million. Issa says the transaction is ""worrisome"" and appears to have shifted risk from BofA to Fannie Mae.

Foreclosure starts soared during the month of August in states along the country's western coast, reversing what had been a declining trend over the past several months, according to ForeclosureRadar. The firm keeps close tabs on foreclosure activity in the states of Arizona, California, Nevada, Oregon, and Washington. It recorded a spike in the first notice filed in the foreclosure process across the five-state coverage area, driven by a 116 percent month-over-month increase in activity from Bank of America.

New Jersey's Superior Court has lifted the last of six injunctions handed down late last year, giving Ally Financial and its GMAC Mortgage unit the go-ahead to resume foreclosure actions in the state. The Superior Court judge issued an order this week stating that GMAC had demonstrated the ""reliability of its processes"" and is ""permitted to resume prosecution of uncontested foreclosure proceedings."" Five other servicers were given the green light to begin the regular order of processing foreclosures in the state last month.

The Federal Housing Finance Agency's decision to pursue legal action against firms that sold residential mortgage-backed securities to Fannie Mae and Freddie Mac could potentially strain relationships between the GSEs and the companies named as defendants, many of whom still sell mortgages to Fannie and Freddie and service home loans held by the two mortgage financiers. Some of the financial firms have been forthcoming with pledges to aggressively defend themselves against the allegations and are disappointed by the fact that FHFA has taken to the courts.

Treasury has released the results of its second-quarter assessment of servicers participating in the Making Home Affordable program. Officials say they will continue to withhold program incentives owed to Bank of America and JPMorgan Chase. The two were determined to need ""substantial improvement"" in key areas including borrower evaluations. BofA and JPMorgan received the same score last quarter, as did Wells Fargo, but Wells has now elevated its grade to needing ""moderate improvement.""

Nevada is asking to be cut loose from a multi-state settlement agreement reached in October 2008 with Bank of America following its acquisition of Countrywide just four months earlier. BofA struck a deal with Nevada and several other states agreeing to provide up to $8.4 billion in interest and principal reductions for Countrywide borrowers. Nevada's attorney general claims the bank has breached that agreement and is asking to be released from it. BofA says it will defend itself against the allegations.

The Federal Housing Finance Agency (FHFA) is the second regulatory body to file a petition with the New York federal court that is reviewing Bank of America's $8.5 billion settlement proposal to Countrywide mortgage investors. FHFA has filed a Notice of Appearance and Conditional Objection in order to obtain additional information related to the proposal, but the agency says it sees ""no basis"" to raise a substantive objection to the settlement at this time.

New York, Nevada, Massachusetts, and Delaware attorneys general continue to voice opposition to a blanket settlement with the nation's top servicers, but HUD and the Justice Department are taking steps to persuade at least one of them to comply. Officials from both agencies are specifically asking New York Attorney General Eric Schneiderman to abandon his objections and approve the settlement. He's reportedly holding out to ensure he can pursue his own legal actions related to the securitization side of the business.