BofA's Moynihan defends foreclosures, most borrowers skipped mortgage for a year
Bank of America (BAC) CEO Brian Moynihan told investors in the third quarter conference call Tuesday that past foreclosure decisions were accurate, and the assessment of its processes should be concluded in the next few weeks. Of the foreclosures BofA completed in the third quarter, 80% of borrowers had not made a mortgage payment for more than one year. On average, borrowers were delinquent on their loan for 560 days, roughly a year and a half. Half of the borrowers were unemployed or had income reduced and a third of the properties were vacant when BofA completed the sale. BofA reported a $7.3 billion loss in the third quarter after more than $10 billion in write downs for its debit card business. BofA suspended foreclosure sales in all 50 states to review affidavits signed by employees without reviewing the documentation or having a notary present. It was the only bank suspected of robo-signing to suspend sales nationwide. Ally Financial (GJM) and JPMorgan Chase (JPM) suspended sales in 23 judicial states during reviews. On Monday, BofA announced it would resume foreclosure sales in 23 states and begin resubmitting 102,000 affidavits on Oct. 25 while it continues to review processes in the other 27. "We continue to do a lot of work. We need to get through the foreclosures and restore the real estate business ahead of us," Moynihan said. In the end, BofA said it anticipates less than 30,000 foreclosure sales will be delayed as a result of the suspension. While many state attorneys general offices and politicians have called for state-wide and even national moratoriums on foreclosures, many in the market have said such action would only delay a housing recovery as the banks need to sell these foreclosed homes in order to ease pricing pain. "We have to get through this difficult work on foreclosures to help the real estate market heal," Moynihan said. Write to Jon Prior.