Setting the Record Straight on Bank of America Foreclosures

Foreclosure is a wrenching personal situation for too many people. In their recent post, "Foreclose on the Fraudsters", William K. Black and L. Randall Wray do nothing to illuminate the challenges they face. When they aren't being merely misleading, the authors are just flat out wrong in discussing Bank of America's actions to help keep the economy moving forward, keep people in their homes, or ensure a fair and consistent foreclosure process if it comes to that. Missing from their presentation are some essential facts, including:

  • We stepped up to purchase Countrywide at a time when failure of that company would have been devastating to the economy, the markets, and millions of homeowners.
  • Our priority remains to keep people in their homes.
  • The vast majority of our portfolio -- 86% -- is current and performing.
  • Modification solutions are intensely focused on the 1.3 million customers who are more than 60 days delinquent -- 85% of which are Countrywide originated loans.
  • Bank of America has completed nearly 700,000 permanent modifications including more than 85,000 under the government's HAMP program -- the most of any servicer.

Further, the basis for our past foreclosures is accurate:

  • Of Bank of America's 1.3 million customers who are more than 60-days delinquent, 195,000 have not made a payment in two years. Of those loans which have not received a payment in two years, 56,000 are already vacant.
  • For the foreclosure sales in the period from Jul-Sep, 2010:
  • 80% of borrowers had not made a mortgage payment for more than one year
  • Average of 560 days in delinquent status (approximately 18 months)
  • 33% of properties were vacant
  • 15% of loans were non-owner occupied (at point of origination)
  • 50% of borrowers were unemployed or severely under employed

Foreclosure is the unfortunate reality of one of the worst economic recessions and housing downturns in history. We take seriously our obligation to the customer, the investor and the economy to manage the process with respect and accuracy. We don't claim perfection and will address mistakes quickly when they arise, but Bank of America is doing all we can to keep people in their homes, or ensure a fair, consistent process if that is not possible.