Bank of America Announces Changes to Resolve Legacy Mortgage Issues and Continue Building the Leading Home Lending Business
CHARLOTTE, N.C., Feb 04, 2011 (BUSINESS WIRE) -- Bank of America President and Chief Executive Officer Brian Moynihan today announced changes to Bank of America Home Loans and Insurance that will continue the company's strong momentum in extending home mortgage credit while improving its leading mortgage modification programs for distressed homeowners and resolving legacy mortgage issues.
The decision is the latest in a series of significant actions taken to resolve outstanding mortgage-related issues while solidifying the company's leading position in mortgage finance. Bank of America in September 2010 initiated a self-assessment of default servicing, and in October became the first servicer to voluntarily suspend foreclosure sales in all 50 states while evaluating the process. While the review of the foreclosure process found that the underlying grounds for foreclosure decisions has been accurate, Bank of America implemented a series of improvements - including staffing, customer impact, and quality controls.
Barbara Desoer, Bank of America Home Loans president, will continue building the mortgage business for Bank of America. Desoer is responsible for servicing loans for the more than 12 million mortgage customers who remain current on their accounts, and for implementing the bank's strategy to be the preferred mortgage choice for its 50 million household customers going forward. In 2010, Bank of America delivered $306 billion in quality mortgage lending to 1.4 million customers.
At the same time, a newly formed unit, Legacy Asset Servicing, has been established. Terry Laughlin will lead this unit and be responsible for servicing all defaulted loans, and for servicing discontinued residential mortgage products. In this role, Laughlin will oversee the bank's mortgage modification and foreclosure programs, and continue to be responsible for resolving residential mortgage representation and warranties repurchase claims.
"This alignment allows two strong executives and their teams to continue to lead the strongest home loans business in the industry, while providing greater focus on resolving legacy mortgage issues," said Moynihan. "We believe this will best serve customers - both those seeking homeownership and those who face mortgage challenges - as well as our shareholders and the communities we serve."
Throughout the housing crisis, Bank of America has demonstrated leadership helping millions of distressed customers. Through the end of 2010, Bank of America completed more than 775,000 permanent loan modifications including more than 100,000 through the government's Home Affordable Modification Program (HAMP) - the most of any servicer. The number of Bank of America customers entering HAMP trial modifications each month has more than tripled since the third quarter of 2010, far exceeding other participating servicers.
Over the past four months, Bank of America has been intensely focused on making improvements, including:
- Enhancing the foreclosure process prior to resuming the bank's foreclosure activities in December 2010.
- Redeploying more than 2,000 specialized sales and fulfillment associates to support default servicing. This is in addition to the hiring and training of 12,000 people over the past two years, resulting in a total of 30,000 helping customers in default.
- Greatly expanding case managers for customers during the modification process, including both HAMP and proprietary efforts. Already, case managers have been assigned to more than 350,000 customers.
- Doubling Bank of America's outreach staff to assist more customers in their own local markets. Bank of America already has opened customer assistance centers in hard-hit communities; gone door-to-door to reach customers with modification offers, and held nearly 600 housing rescue fairs across the country.
- Expanding management capabilities aligned to the Home Loans business, including the most recent additions of former Saxon Mortgage President and CEO Anthony Meola as default servicing executive and Eric Telljohann, formerly chief financial officer for Bank of America's Consumer and Small Business Bank, as credit loss mitigation executive.
Among his other responsibilities, Laughlin will lead an aggressive borrower outreach program to include more than 400 housing rescue fairs in 2011 alone, build additional customer assistance centers in hard-hit communities and expand partnerships with nonprofits.
To capture the value of the industry-leading mortgage platform, Desoer will focus on the future of the Home Loans business, as well as the housing industry as a whole, leading Bank of America's efforts on critical issues such as housing finance reform and the future of the GSEs.
Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with more than 5,800 retail banking offices and approximately 18,000 ATMs and award-winning online banking with 29 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
SOURCE: Bank of America
Reporters May Contact:
Dan Frahm, Bank of America, 1.213.345.9618