Tag Archive | "Bank of America"

Bank of America Looks to Settle Fair-Lending Issue

Bank of America may finally be able to put an end to the fair-lending probe that has largely affected their business operations over the last few months. The most recent press release from the bank indicates that it is nearing a settlement with the United States Justice Department that will ultimately work well for both parties.

While most of the details regarding the settlement are not known at this time, the bank revealed that it would be distributing more money to Countrywide customers as a form of compensation.

The probe and lawsuit against Bank of America came about due to questionable lending practices, including the possible pricing and product placement discrimination against minorities or those with low-income. Acquisitions have come out against that company indicating that certain groups were pushed to certain products based upon their ethnicity and economic situation, thus violating fair-lending standards. More specifically, the company is being accused of pushing subprime mortgages to minorities even when they qualified for a standard loan.

The acquisition of Countrywide has caused nothing but trouble for Bank of America. The bank has since seen its stock shares drop into a freefall, and many worry that the shares will continue to drop in the coming months. Shares fell more than sixty percent in 2011.

If the settlement is approved, Bank of America will have been the largest bank and lending firm to settle a probe and lawsuit with the United States Justice Department. The bank hopes that a settlement will allow it to better focus on regenerating revenue and profit so as to improve the performance of its stock shares.

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Bank of America Opts to Stop Working with Outside Mortgage Lenders

In what should come as no surprise, Bank of America has decided to close its correspondent business at the end of the year. Amidst all of the troubles that have surfaced over the past six months, the company initially looked to sell their correspondent mortgage business. However, a sale was never completed due to a lack of interested buyers.

Although the company plans to close down the correspondent mortgage business, they have made plans to avoid mass layoffs by transferring employees within the division to other sectors of the company. Many of those working in the correspondent sector will move to a division where they will be assisting customers that are facing difficulties with their current loans.

The planned closure is part of larger plan by the major bank to virtually eliminate a majority of the assets acquired through the Countrywide Financial purchase in 2008. In many respects, that acquisition has crippled the company’s bottom line, and as such, Bank of America is looking to relinquish bits and pieces of areas that were part of that sale. Thus far, the major bank has sold an insurance unit, eliminated a reverse mortgage unit, and has performed major cuts on a wholesale lending division.

The closing of the correspondent division will significantly reduce the company’s volume of mortgage originations. The division was responsible for half of the originations in the past year. Although the closure will adversely impact the mortgage originations volume, it is a necessary move, as the company must devote as much manpower as possible to help reduce the ever-growing number of troubled loans.

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Bank of America Sells off Major Portfolio of Commercial Mortgages

As the banking giant continues its efforts to stabilize operations following the adverse actions related to the mortgage crisis, they have agreed upon a deal to sell a very sizable portfolio at a significant discount. The lender has agreed to a sale of thirty-two properties, totaling eight hundred and eighty million dollars to Square Mile Capital Management. Included in the deal are the Renaissance Centre building in Wilmington, Delaware, and the Bank of America Tower in St. Louis.

This latest sale is the most recent of many, as Bank of America looks to reduce the number of assets it holds that are not generally associated with its main business practices. It has sold off nearly twenty billion dollars of portfolios in the most recent months.

Although this current sale of commercial real estate was heavily discounted compared to its current market value, some believe it to be a wise move. The most recent reports are indicating that the commercial real estate market is once again facing a decline, as the reality of a double-dip recession grows clearer. Commercial property values had been steadily improving over the last few years, which had made them highly sought after by investors.

It is expected that Bank of America will continue to look to downsize its commercial real estate portfolio. They have been gradually reducing the number of commercial real estate loans since 2007, though the sales have been much smaller in size. This most recent sale of over eight hundred million dollars in commercial properties, though, may be a strong indicator that the major bank is looking to relinquish commercial property related assets in much more significant numbers than it is over the past few years.

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Bank of America is looking to Sell Countrywide Lending Unit

It appears that Bank of America has made the decision to remove itself from the business of buy loans originally made by smaller institutions. In another move that may indicate the overall troubled outlook of the banking giant, Bank of America Corp. has decided to sell its Countrywide Lending division. There is a potential buyer of the division lined up at this time, though if the deal were to fall through, Bank of America has made it clear that they have no intentions of keeping the division afloat.

If Bank of America were to close down the division instead of reselling it, they would cut nearly fifteen hundred jobs in the process. Analysts have been skeptical of the banking giant’s future, and believe that its hand may be forced in making this decision. The bank has officially announced that they are getting out of the low-margin business to instead focus only on loans made directly by Bank of America with its own customers.

Not many analysts are confident that Bank of America will be able to sell the Countrywide Lending unit, as the loans that it handles are generally considered to be worthless. It should come as no surprise that Bank of America is looking to sever ties with Countrywide, as it’s acquisition of the company has led to billions of dollars in losses over the past three years. With the banking giant now facing potential penalties from the United States government, it has no choice but to cut its losses in any way possible.

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Bank of America Settling Toxic Mortgages

Bank of America which had exposure to a large percentage of toxic mortgages has come out with a plan to get rid of those toxic mortgages by selling it out. Bank of America has set aside $20 billion for getting rid of those mortgages. It has made a settlement with some of its famous investors such as the black rock and the Goldmansachs. Out of this $20 billion, it’s planning to spend $8.5 billion on the mortgages bought by their high profile investors. Bank of America Settling Toxic Mortgages only to benefit their high profile investors has not gone down well with their ordinary retail customers.

Bank of America was extremely comfortable with the transaction until New York Attorney General Eric Schneider man got into the act. He had sent letters to those 22 firms that has been part of the settlement. He has also pointed out that there will be a thorough investigation into the nature of the transaction entered in to by Bank of America. He is of the opinion that both the ordinary retail investors and also the borrowers will get affected by this transaction. Some borrowers will be forced to speed up their foreclosure process. . Bank of America Settling Toxic Mortgages has not gone down well with the New York state administration.

Bank of America on the other hand says that this transaction will only benefit the borrowers and they will get more flexibility in making their interest payments. But some the experts feel that the mortgage service providers have long promised to do things differently, but still have not yet started. One investor is going one step further and is planning to sue the BOA for getting into a secret deal with the settlement’s negotiator. Bank of America Settling Toxic Mortgages has opened a Pandora’s Box and many more skeletons might start falling from the cupboard.

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No More Countrywide-Bank Of America

No More Countrywide-Bank Of America

Bank of America has decided to drop the Countrywide moniker from its identification in order to strengthen its mortgage brand. Bank of America is considered as the second-largest real Estate lender of the world before the downfall in the prices of property and decline in real estate values. Bank of America had purchased this mortgage company in July 2008 and just after ten months from purchasing it was decided by the panel to retire the Countrywide label. The planning over this decision was started from the branches of California. Even when the mortgage rates are observing too low as they have ever been in the past few years, Bank of America is still trying to increase the level of its leverage in real estate industry as it has full confidence over the powerful momentum which was achieved by the bank after the approval of $85 billion against home loans.

The foundation of Countrywide brand was laid in 1969 and now it is going to be retired after being purchased by the American bank. It was believed by the executives of Bank of America that Countrywide designation was looking too toxic to save and just to abandon the name the executives of the bank were resolved. It is now considering just after the re-branding as the coinciding situation for the company with the busiest time of the year for purchasing and selling real estate. Countrywide was used to consider as the largest lender of United Sates besides its involvement with the sub-prime lending movement.

 

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