CHARLOTTE, North Carolina (Reuters) - Bank of America Corp (BAC.N) Chief Executive Brian Moynihan said on Tuesday a quick settlement of the 50-state attorneys general probe of the foreclosure crisis is the best solution for all involved.
“It is in everyone’s best interest to get this settled and behind us,” said Moynihan, speaking at the Bank of America Merrill Lynch Financial Services conference in New York.
Moynihan said the industry and lawmakers need to look at streamlining foreclosures. He said the current system is a “difficult process” for homeowners to navigate.
The largest U.S. mortgage lenders, including Bank of America, have been at the center of a public and political firestorm in recent weeks, as critics allege banks cut corners by using shoddy, improperly reviewed paperwork in foreclosures.
In October, Bank of America instituted a nationwide halt on home repossessions as it reviewed its internal processes. JPMorgan Chase & Co (JPM.N) and Ally Financial Inc’s GMAC Home Mortgage each instituted 23-state foreclosure moratoriums, conducting similar reviews.
Bank of America, in late October, partially lifted the foreclosure halt and said it would refile 102,000 foreclosure affidavits in the 23 states where a judge must sign off on a home repossession. The bank is continuing to review foreclosures in the remaining 27 states where the halt is still in effect.
Moynihan’s comments were made just hours ahead of a U.S. Senate Banking Committee hearing on the subject.
Later on Tuesday, Bank of America’s home mortgage chief is expected to join Iowa’s attorney general as part of the congressional hearing on foreclosure issues.
Separately, Moynihan said the bank was working through its mortgage repurchase requests from private investors. While the costs for buying back bad mortgages will be manageable, Moynihan said such disputes could drag on for years.
Investors were spooked in recent weeks by concerns the largest mortgage lenders would be forced to repurchase billions in defaulted home loans, now held in pools of securities by third-party investors.
Bank of America has been a particular lightning rod for such fears, since the bank announced during third-quarter earnings that roughly $750 billion in mortgages are held by investors and it could not predict how much the bank will be required to rebuy.
Moynihan said the discussions with both Fannie Mae and Freddie Mac, bond insurers and private investors are on-going about what will be repurchased and what will not. But he said the bank would not buy back bad mortgages just to calm angry investors.
“The hand-to-hand combat continues on it every day,” he said.
Reporting by Joe Rauch; Editing by Derek Caney, Dave Zimmerman