Posted by Dave Bullock on 6/23/10 9:50pm
Msg #342258
news of interest
Related News:Finance Bank of America Boosts Staff Handling Troubled Loans
Bank of America Corp., the second- largest U.S. home lender, added 2,000 employees since April to work with borrowers having trouble paying their mortgages, a senior executive said.
The lender now has more than 18,000 workers in “default management,” a 60 percent increase since January 2009, Barbara Desoer, president of Bank of America’s home-loan and insurance unit, said in testimony prepared for a congressional hearing on U.S. housing policy tomorrow. Those workers handle 100,000 calls a day, she said. Wells Fargo & Co., the largest U.S. home lender, Bank of America and other companies have hired thousands of employees or shifted staff from other departments to work with borrowers who have lost jobs or experienced declining incomes. Banks repossessed a record 257,944 homes in the first quarter, 35 percent more than a year earlier, according to Irvine, California-based RealtyTrac Inc. More than a fifth of U.S. mortgage holders owed more than their homes were worth, Seattle- based real estate data provider Zillow.com reported last month.
“Given the depth of the nation’s recessionary impacts on homeowners, a considerable number of customers will transition from homeownership over the next two years,” Desoer said in the testimony. “We must compassionately and responsibly help those customers who have exhausted all their options and can no longer afford to stay in their homes.”
Handling More Calls
Bank of America, based in Charlotte, North Carolina, handles almost 14 million home loans, or about one of every five U.S. mortgages, more than any other U.S. servicer, Desoer said. Payments on 1.4 million loans are more than 60 days late, she said. Investors or government-sponsored entities such as Freddie Mac and Fannie Mae own most of those loans and pay servicers fees to handle billing and collection.
Banks are adding employees to deal with a growing volume of calls and the complexity of programs that modify loans by extending maturities, reducing interest rates or cutting principal balances, Bank of America and other lenders have said. Bank of America has reported $8.4 billion in losses in its home- loan unit since 2008 because of higher defaults.
Bank of America is stalling foreclosures until borrowers exhaust efforts to modify terms or make other arrangements to resolve the loan, such as a short sale or deed-in-lieu transaction, Desoer said. In a short sale, a home is sold at a price less than the balance owed. In a deed-in-lieu transaction, borrowers hand over properties without going through lengthy legal processes.
Top housing executives from Wells Fargo, Citigroup Inc., and JPMorgan Chase & Co. are scheduled to appear with Desoer at tomorrow’s House Committee on Oversight and Government Reform hearing.
To contact the reporter on this story: David Mildenberg in Charlotte at [e-mail address].
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Reply by Baragona/MO on 6/23/10 10:05pm
Msg #342260
Definitely interesting news. I believe we will continue to see more and more transactions take place over the coming months, whether they are short-sales, loan modifications or refinances to stave off foreclosure. Right now, the last thing lenders want to do is take on more properties through foreclosure, as they have too many of them now that they cannot sell. Which means, yes, we will see more need for NSAs in that time.
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Reply by 101livescan on 6/24/10 8:26am
Msg #342292
Thank you so much for sending this. I fully expect that in the coming months and three years, I'll have more foreclosure work than loan work. I see it coming. The banks can't stop the bleeding. People simply can't even abide by the modification terms due to job and income losses...they are just walking, because it is the perfect storm. I talk to people every day who are in this dilemma. When Citibank, Chase and others were hawking 100% LTV loans in home equity prodocts and 80/20 and 90/10/10 purchases, homeowners got buried in debt they can not repay in the coming 5-10 years. Values are not going up, but down. A friend of mine is in foreclosure, has been for over a year, yesterday a locksmith came out to change all the locks for Wells Fargo and to cut the lawn. My friend is still living in the house and has been working on two short sales that Wells Fargo has allowed to slip through their fingers. They simply are inept and incapable of getting their arms around their liabilities. They need to hire some help to get the loss mitigation department proactive and performing. It's a nightmare!
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