Bank of America is a Lagging Behind in Loan Modifications to Prevent Foreclosures
October 30th, 2009
The staff of Bank of America are given a dose of reminder each day of how many miles they sill have to go to reach their goal. Outside the elevators of this massive office building in Plano, Texas on the fringes of Dallas is a thermometer made of cardboard. It inches forward as the bank improves its performance in signing up the risky borrowers to participate in the federal rescue programmes.
Bank of America located in Charlotte, North Carolina is facing the similar challenge as are other important lenders who are involved in rectifying the foreclosure crisis hand in hand with the government. There are only few weeks left for them to complete the deadline set for November by the Obama government. Bank of America is lagging behind considerably in comparison to the other banks as per the data released by the Treasury Department.
The efforts of BofA have been hindered by shortage of staff conversant with the computer systems and the fax tools in tuning with the gigantic scale of the operations. It started off in last March. BofA has also been a slow starter because it had taken a more traditional approach than many other banks. It insisted that the borrowers provide documents of their income and complete all other necessary paperwork before they would be granted preliminary green signal for proceeding with modification. From August the bank became more lenient towards these conditions and started to allow some modifications even without first getting the documents.
This has led to the borrowers facing difficulties. Last summer a correspondence was dispatched by Bank of America that erroneously informed some that they were not qualified to avail of the foreclosure prevention plan. The reason cited was that their loans did not have the backing of either Fannie Mae or Freddie Mac. It was only when a reporter wanted to know from the bank regarding this letter that BofA stopped sending these. A spokesperson of the bank said that the case was being reviewed but she did not know exactly how many letters had been sent.
The government is putting pressure on the lenders to be more active in helping the borrowers facing foreclosures. But many of the employees of Bank of America are nursing doubts whether all those who are looking for help are really in need of it. Jerry Durham of BofA said, “There’s a difference between hardship and entitlement.”
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