Bank of America Opens New Unit in Clean Up Ops

Troubled US Banker Bank of America may be cleaning up troubled in house business units or it might be papering over the cracks in the hazy world of home finance

Bank of America

The influential LA Times have published this report – quote – Bank of America Corp appointed on Friday a new foreclosure and loan modifications czar, and created a new unit to oversee problem home loans in a bid to sort out its ongoing foreclosure issues, becoming the first large U.S. bank to do so.

The new unit creates a seventh major division at the bank reporting directly to Chief Executive Brian Moynihan, an indication that the largest U.S. mortgage servicer is attempting to be more aggressive in resolving its problem loan portfolio.

Analysts said the move is a signal that major U.S. mortgage lenders have not yet turned the corner on dealing with the problem home loans on their books.

“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.

Bank of America, the largest U.S. bank by assets, named Terry Laughlin to oversee the new unit, called legacy asset servicing. The division will have roughly 30,000 employees.

We do not want to sound skeptical but a new unit employing 30,000 workers being trouble free is unlikely to say the least given the past history that appears to be an inherent philosophy of the BofA being ‘bend the rules where you can legally’. In other  words that means look after the bank one hundred times out of 100, then when you are happy that the deal is set up to favor the bank – at that time introduce the client into the process!

Full LA Times article here,0,4863519.story

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