Bank of America Corp. (BAC), the largest U.S. lender, "significantly hindered" a federal review of its foreclosures on loans insured by the Federal Housing Administration, the U.S. said, according to an article today at Bloomberg.com by David McLaughlin.
"Our review was significantly hindered by Bank of America's reluctance to allow us to interview employees or provide data and information in a timely manner," William Nixon, an assistant regional inspector general for the U. S. Department of Housing and Urban Development, said in a sworn declaration.
The filing, dated June 1 and obtained yesterday by Bloomberg News, was submitted as an exhibit in a lawsuit by the state of Arizona against the Charlotte, North Carolina-based bank. Arizona, which is seeking to interview former Bank of America employees, accused the bank of misleading homeowners who were seeking mortgage modifications, the article said.
Federal agencies and attorneys general from all 50 states are investigating the way banks service mortgage loans and conduct foreclosures, the article continued, adding that the "group is in settlement talks with the five largest mortgage servicers, including Bank of America, Wells Fargo & Co. (WFC) and JPMorgan Chase & Co."
The article said that Dan Frahm, a bank spokesman, said that the Bank of America cooperated with the U.S. inquiry, adding "any suggestion otherwise is both inaccurate and inconsistent with how we work with all regulators."
The HUD inspector general's report on Bank of America, which hasn't been made public, was prepared "in light of possible future litigation," the article said, adding that
"Bank of America submitted 40,219 FHA claims totaling $5.7 billion from Oct. 1, 2008, through Sept. 30, 2010, according to the declaration. About 86 percent of its claims were for loans previously serviced by Countrywide Financial Corp., which Bank of America acquired in 2008."
"Bank of America may face a further $27 billion of housing- related losses between now and 2013 amid increasing regulation as the economic recovery slows, analysts at Sanford C. Bernstein said in a note yesterday. The losses would be in addition to the $46 billion the lender has booked so far, analysts led by John E. McDonald wrote," the article said.
About 44 percent of Bank of America's total lending is linked to housing, compared with 34 percent at its competitors, Bernstein's McDonald said, the article said.
The company will probably settle demands from private investors that it repurchase soured mortgages by paying about $7 billion this year, Mike Mayo, an analyst at Credit Agricole Securities USA in New York, wrote yesterday in a research note.
As part of the HUD inspector general's review, Bank of America provided access to more than 55,000 pages of material and voluntarily coordinated interviews and assisted with arranging depositions with two dozen employees, Frahm, the bank spokesman, said in an e-mail yesterday, the article said.
According to Nixon's declaration, it continued, "when interviews with Bank of America employees were permitted, the presence or involvement of the bank's attorneys 'limited the effectiveness' of the interviews. Attorneys also refused to allow employees to answer questions 'on a number of occasions.' The bank's delay in providing 'readily available information' also hurt the review of the bank's processes and controls, Nixon said. The information provided in response to two subpoenas wasn't complete, he said."
"Our review was significantly hindered by Bank of America's reluctance to allow us to interview employees or provide data and information in a timely manner," William Nixon, an assistant regional inspector general for the U. S. Department of Housing and Urban Development, said in a sworn declaration.
The filing, dated June 1 and obtained yesterday by Bloomberg News, was submitted as an exhibit in a lawsuit by the state of Arizona against the Charlotte, North Carolina-based bank. Arizona, which is seeking to interview former Bank of America employees, accused the bank of misleading homeowners who were seeking mortgage modifications, the article said.
Federal agencies and attorneys general from all 50 states are investigating the way banks service mortgage loans and conduct foreclosures, the article continued, adding that the "group is in settlement talks with the five largest mortgage servicers, including Bank of America, Wells Fargo & Co. (WFC) and JPMorgan Chase & Co."
The article said that Dan Frahm, a bank spokesman, said that the Bank of America cooperated with the U.S. inquiry, adding "any suggestion otherwise is both inaccurate and inconsistent with how we work with all regulators."
The HUD inspector general's report on Bank of America, which hasn't been made public, was prepared "in light of possible future litigation," the article said, adding that
"Bank of America submitted 40,219 FHA claims totaling $5.7 billion from Oct. 1, 2008, through Sept. 30, 2010, according to the declaration. About 86 percent of its claims were for loans previously serviced by Countrywide Financial Corp., which Bank of America acquired in 2008."
"Bank of America may face a further $27 billion of housing- related losses between now and 2013 amid increasing regulation as the economic recovery slows, analysts at Sanford C. Bernstein said in a note yesterday. The losses would be in addition to the $46 billion the lender has booked so far, analysts led by John E. McDonald wrote," the article said.
About 44 percent of Bank of America's total lending is linked to housing, compared with 34 percent at its competitors, Bernstein's McDonald said, the article said.
The company will probably settle demands from private investors that it repurchase soured mortgages by paying about $7 billion this year, Mike Mayo, an analyst at Credit Agricole Securities USA in New York, wrote yesterday in a research note.
As part of the HUD inspector general's review, Bank of America provided access to more than 55,000 pages of material and voluntarily coordinated interviews and assisted with arranging depositions with two dozen employees, Frahm, the bank spokesman, said in an e-mail yesterday, the article said.
According to Nixon's declaration, it continued, "when interviews with Bank of America employees were permitted, the presence or involvement of the bank's attorneys 'limited the effectiveness' of the interviews. Attorneys also refused to allow employees to answer questions 'on a number of occasions.' The bank's delay in providing 'readily available information' also hurt the review of the bank's processes and controls, Nixon said. The information provided in response to two subpoenas wasn't complete, he said."
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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