bank of america foreclosures

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June 30, 2008

Planned purchase of Countrywide Financial Corporation by Bank of America (BofA) forced over 90 California community groups to send request letters to BofA seeking the halt of foreclosures. California Reinvestment Coalition drafted the letter asking the bank to devise a plan to help these homeowners retain their homes. This bank acquisition adds 9 Million new customers, most of whom are under sub prime mortgage loans.

This acquisition comes amidst a severe credit crunch in the country’s economy, with talks of a recession doing the rounds in many circles. The sub-prime crisis has hit an all-time peak, and real estate companies involved in giving predatory loans have suffered large losses across the board.

The groups requested Bank of America to have a foreclosure moratorium on loans in the banks’ portfolios. They also requested that they retain Calabasas, California as Countrywide’s headquarters and all keep all the employees needed for loan restructuring and modification.

Rhea Serna, a senior policy advocate for the California Reinvestment Coalition said that this merger has the potential to reverse the “bad” loans with Countrywide and enable thousands of homeowners to retain their homes. BofA spokesman Scott Silvestri, however, stated that since the two banks are still separate entities, it is not possible to comment on the status of their future plans. But both parties have a common objective of saving homes from foreclosures wherever possible and will do all they can o help borrowers. They have also announced plans to work with the defaulters.

Pursuing its plans, BofA has filed an application with the Federal Bank of Richmond to get regulatory approval for the acquisition worth $4.1 billion stock deal. The Charlotte bank stated that this filing exempts it from a law which prevents banks from acquiring more than 10 percent of nation’s total deposits through the acquisition route, since Countrywide’s deposits are in the form of loans and savings.

Though the deadline for the actual sale is not yet decided, as the mortgage reverse slide is heating up, California communities are doing all they can to save their homes from coming under the foreclosure eye. They are trying all that they can to save their homes.

The coming days will tell us whether these communities stand a chance to retain their homes, or whether these homes will add fuel to the mortgage crisis plaguing the country, and causing massive losses to the real estate industry in the US.

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