Bank of America previewed and helped to soften its executives’ planned apology before Congress today by letting the Times into its massive Simi Valley, California, foreclosure operation.
It’s not a bad story, either. It gives an idea of the scale of it all: 4,000 workers fielding 50,000 calls a day. And it shows mortgage “misery” from the perspective of the listeners.
To many Americans, financial giants like Bank of America seem like foreclosure machines. First, the argument goes, banks gave people mortgages they could not afford. Now, lenders are foreclosing as fast as they can, sometimes without even reviewing the paperwork.
But for employees here like Brenda Seymore, the foreclosure crisis is more complicated than that. She joined as a temporary worker in 2009 and was hired full time a year ago, as one of the employees who together field 50,000 calls a day. She finds herself caught between frustrated, anxious homeowners many months behind on their mortgage payments, and investors who hold mortgages and do not necessarily want to modify the loans, or reduce the amount of money homeowners owe.
“It’s a learning process,” she said. “Our goal here is to find a resolution.”
Is this a positive story for the bank? Sure. Is it a legitimate perspective? Well, yes. And the Times previously has done good work on foreclosure abuses. Still, this one is a bit much. How about finding someone on the other end of the line?
Amid this comfy feature, the bank’s apology for the foreclosure mess is strategically nestled:
At the Senate banking committee hearing on Tuesday, Barbara J. Desoer, president of Bank of America Home Loans, plans to announce new initiatives like assigning a single case manager so homeowners do not get passed from one bank employee to another. The bank also will start providing checklists so borrowers know exactly where they stand in the modification or foreclosure process.
“We, and those who work with us in connection with foreclosure proceedings, also have an obligation to do our best to protect the integrity of those proceedings,” Ms. Desoer is expected to tell the committee, according to prepared testimony obtained by The New York Times.
“When and where that has not happened, we accept responsibility for it, and we deeply regret it,” according to her testimony.
A spoonful of sugar helps the medicine go down—in the most delightful way!
Meanwhile, over at the Journal, the friendly mortgage aftermarket people are leaking their defense of securitization before the same committee.
The American Securitization Forum, a trade group for the securitization industry, is set to release on Tuesday a 28-page defense of widely used practices for bundling mortgages into securities. The securitization process and foreclosure-documentation practices are likely to face criticism from lawmakers at a Senate Banking Committee hearing Tuesday.
That leak may have been in anticipation of this leak:
A separate report from the Congressional Oversight Panel, also being released Tuesday, raises questions about whether improper document transfers could create additional liabilities for the biggest U.S. banks. The consequences could be “severe,” the report said, “if documentation problems prove to be pervasive and, more importantly, throw into doubt the ownership of not only foreclosed properties but also pooled mortgages.”
(Unlike the Journal, The Audit, a full-service blog, provides a link.)
The WSJ also got the BoA script:
Also at the hearing, Bank of America Corp. executive Barbara Desoer is expected to acknowledge some weaknesses were found in the Charlotte, N.C., bank’s internal review of foreclosure practices.
Why bother holding the hearings?
Maybe the AGs should try the leak thing. Then, well, public representatives might get a word in edgewise. That’d be excellent.
Also testifying at Tuesday’s hearing is Iowa Attorney General Tom Miller, who leads the nationwide investigation into the foreclosure problems that erupted in September. The attorneys general are scrutinizing whether home-loan servicers violated state laws against deceptive practices by submitting affidavits and foreclosure documents without confirming the paperwork’s accuracy.
PR has always shaped the news, but today it absolutely dominates the coverage by these mainstream stalwarts of the run-up to this not-small hearing.
All in all, is this okay? Um, no. It’s not.
Further reading, humbly suggested: “The Hamster Wheel.”
Dean Starkman Dean Starkman runs The Audit, CJR’s business section, and is the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.