The potential costs to Bank of America resulting from foreclosure foibles aren’t as bad as some people think, according to Bank of America home lending and insurance president Barbara Desoer. The costs related to the latest mortgage mess are “grossly distorted,” told Bloomberg.
She said that the bank’s foreclosure review will impact fewer than 30,000 home sales, and the company will work to remedy 102,000 foreclosures across 23 states. Fellow giant bank JPMorgan Chase said earlier this week that it was reviewing 115,000 loan files.
Desoer’s comments stand in contrast with the current perception of Bank of America, which is currently being punished by investors and analysts for fear that costs associated with shoddy foreclosure paperwork could prove overwhelming for the bank. Of the major U.S. lenders who have suspended foreclosure activity, Bank of America is the only one to have stopped foreclosures in all 50 states. It has also become, in a way, a bellwether for the foreclosure crisis thanks to its 2008 acquisition of Countrywide Financial, which at the time was the nation’s largest mortgage originator.
Meanwhile, attorneys general across all 50 states are launching a joint investigation into improper foreclosure filings by banks. JPMorgan, Ally’s GMAC, BofA, PNC and Goldman Sachs have all slowed down their foreclosure processes in recent weeks in response to the budding fiasco.