Bank of America Adds Speed to Foreclosure Prevention Efforts

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Fighting on the back foot, hemmed in by criticism, Bank of America is now adding speed to its foreclosure prevention efforts. Other lenders are following suit as they are under pressure from the government to show more positive results.

BofA has been facing legal suits. Legislators are conducting investigations regarding its taking over Merrill Lynch. Regulators are also questioning about the bonus deals. Against this scenario the bank has increased by 62% it trial modification efforts. The number has gone up to 95,000 in September according to the findings of CNBC.

BofA is the biggest bank in USA. It has also stepped up the number of modification offers covered by Home Affordable Modification Program to touch 156,000 in September. It can be favourably compared with 125,338 in August. The banks said that in general its attempts at speeding up will “continue to grow.”

The Treasury is poised to release its data (3rd month) of the performances of 48 mortgage loan servicers who are taking part in this plan. Last spring this programme had been launched with much trumpeting.

The BofA data is in agreement with the report of the Treasury.

The government is optimistic that by 1st November 2009, 500,000 loan modifications would be completed. In the beginning the goal was that during the initial two years 3 million to 4 million home mortgage loan takers would benefit. BofA claims that the bank is hopeful of negotiating a quarter of these loans by the November deadline.

The figures on the success rate are not exhaustive but from trends it seems the programme is lagging behind. It is hardly six months since the programme took off and to mark it with a success point it has to operate six months on a trial run.

The Bank of America was one of the many banks that have had to face criticism for showing poor results since the start of the plan. It had become obvious from the start that the administration would be unable to reach its targeted goal. White House has tried to explain it as typical teething problems. At the same time it blamed the servicers for their lack of commitment and sincerity. Pressure is now being put on them so that they double their efforts.

Since August the Treasury has been regularly releasing data to mark the progress of the scheme.

The government and industry feel that unemployment has been adding to the problems.