Bank of America Corp. (NYSE:BAC), one of several large banks and mortgage lenders who were part of a $25 billion foreclosure settlement with federal regulators and state attorneys general, is far behind its peers in financing the mortgages in its $1 billion program and has received complaints from customers for its work, according to a report from Bloomberg News.
Bank of America Corp. (NYSE:BAC) is blaming the “time required to underwrite” the mortgages that are part of the settlement, and an analyst says that the bank has the largest burden compared to peer institutions – JP Morgan Chase & Co. (NYSE:JPM) has a $00 burden while Wells Fargo & Company (NYSE:WFC) is working on $900 million in mortgages – with less infrastructure.
“The infrastructure at Bank of America has to handle an issue of this magnitude isn’t great, so they’re last out of the gate,” said Nancy Bush of SNL Financial, a Charlottesville, Va.-based research firm.
JPMorgan Chase & Co. (NYSE:JPM) reports that it has refinanced a “significant number” of its mortgages, while Wells Fargo & Company (NYSE:WFC) says it will have its $900 million group of mortgages finished about two years earlier than its 2015 deadline. Bank of America Corp. (NYSE:BAC) and the other banks get incentives for completing their underwriting ahead of schedule, but face penalties for not reaching certain mileposts. Homeowners eligible for this program are those who are “underwater” but are current on their mortgages. The banks are also involved in a separate program that reduces principal of some loans or gives cash incentives to “short sell” a home.
Bank of America Corp. (NYSE:BAC), however, says it is on track to finish the program on schedule and vows it will not pay any penalties.