BofA CEO Says Foreclosure Deal Will Take Time

Wednesday, 01 Jun 2011 11:22 AM

 

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A settlement between a coalition of federal and state agencies and U.S. banks over foreclosure practices will take longer to hammer out than many expect, Bank of America Corp. Chief Executive Brian Moynihan said Wednesday.

Moynihan, speaking at a Sanford Bernstein conference in New York, said talks with state attorneys general, the U.S. Department of Justice and other agencies are progressing, but the number of parties involved slows down the discussions.

"The time frame keeps moving out because you have 50-plus people involved by definition," he said. "I think it will take longer than people will think."

BofA, the largest U.S. mortgage servicer, and several other big mortgage lenders have been engaged in discussions since last fall to settle allegations that the industry cut corners in repossessing homes from delinquent borrowers.

In April, the largest U.S. banks, including BofA, settled with federal bank regulators, including the Federal Reserve, the Office of Thrift Supervision and the Office of the Comptroller of the Currency.

Under the terms of that deal, the banks are overhauling their foreclosure processes and hiring outside consultants to review foreclosures completed in 2009 and 2010.

Separately, Moynihan said BofA will continue to fight outside investors who want the bank to repurchase toxic mortgages, but conceded that settling those disputes is sometimes in shareholders' best interest.

"There's a point where fighting doesn't have any value," he said.

Last fall, Moynihan described the dispute as hand-to-hand combat and said the bank would fight to protect the interests of its shareholders.

But in recent months, BofA has entered into settlements with large outside mortgage investors and insurers.

In early 2011, it settled most repurchase claims with Fannie Mae and Freddie Mac, the government-controlled mortgage buyers.

In April, the bank announced a $1.6 billion settlement with Assured Guaranty Ltd, which insured mortgage bonds that have since reported losses because of toxic mortgages.

Despite the foreclosure and repurchase concerns, Moynihan said BofA sees no need to raise outside capital.

© 2014 Thomson/Reuters. All rights reserved.

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