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Tag Archives: Bank of America

Bank of America Establishes New Unit to Handle Defaulted Loans

Bank of America has set up a new operational division to service all defaulted residential loans. It will be led by Terry Laughlin, who will oversee the bank's mortgage modification and foreclosure programs, and is charged with resolving investors' mortgage repurchase claims. The decision to establish a new, separate division to handle the company's problem loans came out of the bank's ""self-assessment of default servicing"" following the robo-signing scandal.

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Moody’s Takes a Closer Look at the Dynamics of Mortgage Re-Defaults

Moody's Investors Service studied two million loans backing residential mortgage-backed securities (RMBS) pools and found that a loan that is modified and then reported as current is three times as likely to default over the ensuing twelve months as a current loan that has not been modified. The agency's also put the practices of eight major servicers under the microscope. It found that six-month re-default rates vary considerably, from 20 percent for Citi and Litton to 33 percent for Bank of America.

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BofA Agrees to Sell Its Balboa Insurance Business to Australia’s QBE

Bank of America has agreed to sell the lender-placed and voluntary property and casualty insurance assets and liabilities of Balboa Insurance Company to QBE Insurance Group of Australia. BofA inherited Balboa Insurance when it purchased Countrywide Financial Corp. Bank of America and its affiliates are expected to receive an upfront cash payment of approximately $700 million for the deal with QBE, as well as additional future payments.

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HAMP Mods Slowing, Outnumbered by Rejections and Cancelations

Last week, the special inspector general for the Troubled Asset Relief Program, released a report to Congress saying servicers are not doing all they can to help facilitate the process of keeping borrowers in their homes. To date there have been 1,025,907 homeowners rejected for HAMP modifications by the eight largest servicers, and there have been 572,655 canceled trial modifications, which typically occurs because of insufficient documentation, program ineligibility, or because the borrower missed payments.

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Watchdog Says Bank Bailouts Made ‘Too-Big-to-Fail’ Even Bigger

The passing of the Dodd-Frank Reform Act last summer was hailed as the end of ""too-big-to-fail"" and the end of corporate bailouts. But in a report to be presented to Congress Wednesday, Neil Barofsky, head of the group charged with overseeing the government's handling of the Troubled Asset Relief Program (TARP) says the ""too-big-to-fail"" problem has not been solved; in fact, it's gotten worse, thanks to implicit guarantees that came with the massive bailouts of companies such as Citigroup, AIG, and Bank of America.

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Bank of America and Wells Fargo Most Sued Banks in 2010

A recent report by Institutional Risk Analytics (IRA) says Bank of America and Wells Fargo are two of the most sued financial service firms in the United States. IRA says that mortgage exposure is what is causing these two banks and others in similar situations to be embroiled in so many federal legal cases. In addition, the firm points to the added burden many of these companies are also facing in litigation that will not reach federal court, such as cases involving foreclosure practices.

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Bank of America Loses $2.2B in 2010

The nation's largest bank reported this morning that it lost $2.2 billion in 2010. During the fourth-quarter period, Bank of America posted a net loss of $1.2 billion, which included a goodwill impairment charge of $2.0 billion in its home loans and insurance division. Had it not been for this charge, the company says it would have earned $756 million in the fourth quarter. The company called 2010 a year of ""necessary repair and rebuilding."" Bank of America is the only one of the 'Big Four' to report a loss.

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New York City Comptroller Issues 2nd Request for Audits From Banks

In November after the robo-signing scandal broke, New York City Comptroller John C. Liu, on behalf of the New York City Pension Funds, called on the directors at Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo - which together service more than half of the nation's mortgages - to conduct an independent audit of their foreclosure practices. This week, Liu issued a demand for the banks to immediately follow through on that request, this time backed by 11 major public pension funds from several states.

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Mortgage Casualties Decrease in 2010: Industry Report

Fewer mortgage-related firms closed their doors during 2010 than in 2009, according to newly released industry data. Including mortgage companies, retail and wholesale credit unions, and federally insured banks, the report tracked 201 mortgage-related business operations that either failed or were shut down during 2010. The casualty list was smaller than 2009's count, which stood at 230 mortgage-related fatalities - the most since 1998, when the report was first issued.

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U.S. Bank Closes Acquisition of BofA Securitization Trust Administration

U.S. Bancorp announced on Tuesday that it has completed its acquisition of the securitization trust administration side of Bank of America. The agreement was finalized on December 30, 2010. U.S. Bank acquired around 2,153 active securitization and related transactions, more than 2.4 million residential mortgage files and 84,000 commercial files, and $1.1 trillion in assets under administration.

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