A recent report from Fitch Ratings indicates that Bank of America has received a rating of “Outlook Stable” and “RPS2-” for five servicing products including Prime, Alt-A, HELOC, Subprime, and Second Lien. But what did this high-profile bank implement that contributed Fitch Ratings' high scoring?
The report says that for the review period ending on June 30, 2016, the bank’s “comprehensive internal control environment”, “continued investments in technology”, and “incremental operational enhancements” earned them the Fitch Ratings’ rankings.
Specifically, Fitch reports that Bank of America’s comprehensive internal control environment including internal audit, compliance, and QC testing, made a large impact.
“The company's internal audit results for the servicing operations continued to show improvement,” says Fitch Ratings. “[Bank of America]'s Regulation AB report for the year ended Dec. 31, 2015 contained one instance of material noncompliance, a decrease from three instances of material noncompliance in the prior year.”
The report also states that the bank also continued to work during this time to decrease its delinquent portfolio.
“In conjunction with these initiatives, the company has continued to make incremental operational enhancements to servicing operations, including the implementation of an interactive voice system to augment live agent collections calls and virtual messaging, and a new application to provide a centralized location that houses all borrower call notes across the servicing operation,” adds the report.
Though this report only factor’s in efforts done before July, it is clear from the institution’s Q3 Earnings Report that the work to improve its mortgage division has not ceased.
According to the bank’s earning report, a substantial increase in mortgage production was a large driver of the earnings growth. Total mortgage production rose by 21 percent in the third quarter up to $20.4 billion.
“Strong client activity and good expense discipline combined to drive positive operating leverage as we continue to optimize and strengthen our balance sheet,” said Paul M. Donofrio, Chief Financial Officer for Bank of America in the report. “With near-record levels of capital and liquidity, as well as robust underwriting standards, Bank of America is stronger, safer and better prepared to deliver for customers and clients than probably at any time in our history. We remain focused on delivering long-term value to shareholders.”