B of A's Mortgage Chief Testimony : We're at a 'Crossroads' on ForeclosuresSubmitted by bobbyw24 on Tue, 11/16/2010 - 15:43
B of A's Mortgage Chief: We're at a 'Crossroads' on Foreclosures
Tuesday, November 16, 2010
Bank of America, the nation's largest servicer of home mortgages, said in prepared testimony Tuesday that the company is at a "crossroads" between loan modification efforts "and the reality of foreclosure" with 14% of its home mortgage customers in some stage of delinquency.
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"The majority of initial volume and backlog of customers seeking solutions have been evaluated for available programs," said B of A mortgage chief Barbara Desoer. "We're reaching a peak where some customers will be dealing with the reality that despite the myriad of programs and our best efforts, foreclosure is unavoidable."
She noted that the servicer is "constrained by our duties to investors," adding that of the nearly 14 million loans in its servicing portfolio, just 23% are owned by the bank with the balance under the control of investors in the secondary market. (Fannie Mae and Freddie Mac, she said own 60% of these loans.)
"Many investors limit Bank of America’s discretion to take certain actions," she said. "When working with delinquent customers, we aim to achieve an outcome that meets customer and investor interests, consistent with whatever contractual obligations we have to the investor."
Testifying before the Senate Banking Committee, Desoer said 86% of its mortgage customers are current, making their mortgage payments each month.