Monthly Archives: April 2014

Bank of America finds a mistake: $4 billion less capital

Bank of America disclosed on Monday that it had made a significant error in the way it calculates a crucial measure of its financial health, suffering another blow to its effort to shake its troubled history. The mistake, which had gone undetected for several years, led the bank to report recently that it had $4 billion more capital than it actually had. After Bank of America reported its error to the Federal Reserve, the regulator required the bank to suspend a share buyback and a planned increase in its quarterly dividend. While regulators still believe Bank of America has sufficient capital, the disclosure of the accounting error will most likely add fuel to the debate over whether the nation’s largest banks are too big and complicated to manage. The error also raises questions about the quality of Bank of America’s own accounting employees, who are supposed to present an accurate financial picture of...
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Foreclosures Up in March, but Down 10 Percent from Last Year

Completed foreclosures increased by nearly 6 percent in March, moving from 45,000 in February to 48,000.  CoreLogic said this morning that there were, however 10 percent fewer foreclosures than in March 2013 when 53,000 homes were foreclosed.  The total number of foreclosures for the 12 months ended in March declined for the 27th consecutive month and was the lowest aggregate sum since December 2007. The company estimates that there have been about 5 million homes lost to foreclosure since the housing crisis began in September 2008 and, while the incidence is down dramatically from the peak, foreclosures are still running at nearly twice what might be considered a normal pace.  As a basis of comparison the company said that between 2000 and 2006 foreclosures nationwide averaged around 21,000 per month. The foreclosure inventory or number of homes in some stage of foreclosure is also down substantially, 37 percent from one year ago....
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BofA Pays $111 Million to Mortgage Investors for Servicing Error

Bank of America Corp.  paid $111.4 million to mortgage-bond trusts after cutting the balances on home loans more than allowed under the terms of an $8.5 billion settlement, according to a trustee notice to investors. The lender completed 10,786 loan modifications “using valuation tools different from those prescribed” by the accord, according to the April 25 notice from Bank of New York Mellon Corp., the trustee. Bank of America reached the 2011 deal with a bondholder group including BlackRock Inc. and Pacific Investment Management Co. The agreement, which is pending a court appeal by other investors, settled claims that Bank of America’s Countrywide unit mishandled servicing and failed to repurchase mortgages that never matched their promised quality. The deal offered cash payments and a shift in protocols for managing troubled mortgages, including by moving them to specialist firms and establishing more specific guidelines. Under the accord, loan balances after modifications shouldn’t fall below...
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