McCollum Cautiously Optimistic of BoA Mortgage Help
Attorney General Bill McCollum said Thursday that Florida’s leading mortgage lender is promising more “boots on the ground” in the state to help homeowners stave-off foreclosures.
McCollum huddled this week with officials from Bank of America who are assuring him that more loan officers will be positioned at branch banks across the state to help lenders rework terms of potentially troubled mortgages.
“By some point in January, they will have people in Florida – boots on the ground in Florida – to do this,” McCollum said. “Now whether this is going to be a one-time operation in here for a couple of weeks and out, I don’t know. But they are going to be here providing some face-to-face contacts.”
McCollum said the meeting stemmed from a letter he wrote last month to four of the largest banks operating in Florida saying that as attorney general, he has been on the receiving end of calls from hundreds of homeowners trying to reduce monthly payments or modify mortgage terms.
In many cases, McCollum said, homeowners are directed by the banks to contact an 800 number, resulting in little more than a runaround. McCollum said it was “outrageous” that such little help is offered – especially after many homeowners were courted by the banks before securing the now-troubled mortgages.
Although Bank of America officials could not be immediately reached for comment, McCollum said he was “a little bit encouraged, but we’re in a wait-and-see posture.” While McCollum’s letter went to Florida’s big banks, the Obama administration also has been pressuring Bank of America and other lenders to negotiate with troubled borrowers to slow the foreclosure crisis.
After a slow start -- which drew criticism from consumer organizations -- Bank of America has lately launched programs in several states aimed at making it easier for troubled lenders to work with bank officials to rework payment plans.
Foreclosures fell 8 percent nationally last month over October – the fourth straight month of decline across the country, according to the property listings site, RealtyTrac, reported Thursday. Florida, California, Illinois and Michigan, however, still account for 52 percent of the foreclosure filings across the nation.
Meanwhile, McCollum tamped down any political implications involving Bank of America. McCollum is the leading Republican candidate for governor and would likely face Democratic Chief Financial Officer Alex Sink, a former president of the Florida division of Bank of America, in next year’s contest.
“There’s no politics to this at all,” McCollum insisted. Bank of America, he said, “is the largest player. It’s very coincidental.”
Bank of America has risen to become a mortgage giant after taking over the nation’s largest subprime lender, Countrywide Financial, which collapsed last year. McCollum was among several state attorneys general who successfully reached a settlement with Countrywide over deceptive loan practices.
The $4 million from the settlement was used by the Florida Bar to recruit legal aid lawyers to counsel families facing foreclosure around the state.
The Florida Supreme Court has recommended that mediation be required between lenders and those facing foreclosures, effectively forcing banks to offer better repayment terms.
McCollum, though, said the state’s hands are tied because regulators have little authority over federally chartered banks.
“Some state legislation would probably be a good idea, but remember with the nationally chartered banks…we have very little direct regulatory control,” McCollum said.