BofA (BAC) Hinders Investigation into Foreclosure Process of FHA-Backed Loan
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Price: $38.32 --0%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 2.8%
EPS Growth %: -11.7%
Overall Analyst Rating:
NEUTRAL (= Flat)
Dividend Yield: 2.8%
EPS Growth %: -11.7%
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Bank of America (NYSE: BAC) appears to be the Donkey Kong to the Fed's Mario, tossing barrels of scrambled information to delay the rescue of the Princess (information on loan foreclosures insured by the Federal Housing Administration).
According to Bloomberg reports from Monday, BofA had "significantly hindered" a federal review of FHA-backed loan foreclosures. BofA was slow to provide information, the U.S. Department of Housing and Urban Development inspector general’s office said, though the bank did cooperate with the investigation.
Assistant regional inspector general Willian Nixon said BofA was reluctant "to allow us to interview employees or provide data and information in a timely manner." Nixon made the statement in a lawsuit filed in the State of Arizona, which is seeking redemption from BofA after the regulator accused the bank of misleading homeowners seeking mortgage modifications. Additionally, Nixon said BofA basically had its attorney's in the rooms where interviews were being conducted, limiting the effectiveness of the interview, and not allowing interviewees to respond to questions on a number of occasions.
One issue being investigated is whether loan documents were properly transferred to mortgage-bond trusts run by institutions like Bank of New York (NYSE: BK) and Deutsche Bank (NYSE: DB). Another issue involves whether enough due diligence was performed on the loans.
Research firm Bernstein estimates BofA will see a further $27 billion in housing-related losses between now and 2013 -- in addition to $46 billion the bank has booked so far. Bernstein believes as long as BofA's housing-related losses don't exceed $55 billion, the bank should be able to boost its Tier 1 capital ratio to 8.5 by 2013 without needing to raise more capital. The firm noted about 44 percent of BofA's total lending is tied to housing, compared with just 34 percent at most competitors.
According to Bloomberg reports from Monday, BofA had "significantly hindered" a federal review of FHA-backed loan foreclosures. BofA was slow to provide information, the U.S. Department of Housing and Urban Development inspector general’s office said, though the bank did cooperate with the investigation.
Assistant regional inspector general Willian Nixon said BofA was reluctant "to allow us to interview employees or provide data and information in a timely manner." Nixon made the statement in a lawsuit filed in the State of Arizona, which is seeking redemption from BofA after the regulator accused the bank of misleading homeowners seeking mortgage modifications. Additionally, Nixon said BofA basically had its attorney's in the rooms where interviews were being conducted, limiting the effectiveness of the interview, and not allowing interviewees to respond to questions on a number of occasions.
One issue being investigated is whether loan documents were properly transferred to mortgage-bond trusts run by institutions like Bank of New York (NYSE: BK) and Deutsche Bank (NYSE: DB). Another issue involves whether enough due diligence was performed on the loans.
Research firm Bernstein estimates BofA will see a further $27 billion in housing-related losses between now and 2013 -- in addition to $46 billion the bank has booked so far. Bernstein believes as long as BofA's housing-related losses don't exceed $55 billion, the bank should be able to boost its Tier 1 capital ratio to 8.5 by 2013 without needing to raise more capital. The firm noted about 44 percent of BofA's total lending is tied to housing, compared with just 34 percent at most competitors.
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