Bank Of America Becomes Proactive: Creates Foreclosure Unit
By Susan Thompson on February 9, 2011, 11:47 am
Legacy Asset Servicing, the new unit, will have its hands full as it deals with backlogs of issues that forced the bank to suspend the foreclosing process back in October this past year. They will handle buyback claims on loans sold to investors that were bad and handle any mortgage modifications that occur.
The Largest US Bank
Bank of America is already the largest U.S. Bank and the former FleetBoston executive Laughlin and his department will have its hands full fixing one of the biggest problems that has been a sore in our economy for years. The Home Loans Unit like always will provide service of handling current loans and will be reviewing and accepting new loans as usual.
New Point Man
Terry Laughlin–formerly CEO of OneWest Bank, the successor to failed thrift IndyMac Bancorp, before joining Bank of America a year ago–will lead the new Legacy Asset Servicing unit. He was the point man on the recent deal to settle claims by Fannie Mae and Freddie Mac. Formerly, he reported to Barbara Desoer, head of the consumer mortgage and insurance unit, who will continue to seek new business and service more than 12 million customers. In his new job, Laughlin will report directly to CEO Brian Moynihan, with whom he has worked previously at FleetBoston.
Ability To Focus
“This is a significant step. If Bank of America has these issues, what kind of problems does everyone else have?” said Matt McCormick, a Cincinnati-based portfolio manager at Bahl & Gaynor Investment Counsel Inc. The change splits the bank’s mortgage business into two parts: one focused on current and new mortgages, and another dedicated to foreclosures and workouts.
Working To Resolve Foreclosure Issues
The new unit will manage foreclosures and loan modifications, and will work to resolve mortgage repurchase claims from investors. Last fall the bank temporarily suspended foreclosures after critics alleged the industry cut corners on foreclosure paperwork and used so-called robo-signers, employees who signed thousands of foreclosure notices without reviewing the documents.