Monday, February 7, 2011

Bank of America Creates New Unit For Foreclosures

I thought this was what banks were going to do 3 years ago when they were bailed out with TARP Funds. I guess they needed a little time to get their house in order.  The accounting rules had to be changed and the banks had to see if they could get away with using fraudulent documents to foreclose on homeowners before they were willing to address the numerous toxic assets.  They basically were being greedy because they didn't want to off load these so called toxic loans at market value when they could just sit on them with government support.  You can bet that if the housing market had rebounded any amount, the banks would be even less willing to address their toxic asset issues.  As long as they were flush with cash from the government, they were going to ride it out as long as possible. 

Bank of America Corp. on Thursday said it is splitting its mortgage business into two units, with a new division created specifically to handle foreclosures and discontinued loan products.

The bank said the new Legacy Asset Servicing unit will be responsible for resolving issues involving faulty paperwork that led Bank of America to suspend foreclosures in all 50 states in October. After reviewing procedures, it resumed the actions nationwide in December.

The legacy unit will also handle mortgage modifications and buyback claims on bad home loans sold to investors. It will be led by Terry Laughlin, who joined Bank of America in July 2010 as an executive in its mortgage unit handling credit loss mitigation strategies.

The move is the latest in a series of management shifts since Brian Moynihan took over as CEO in January 2010.

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Bank of America Creates New Unit For Foreclosures

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