Bank of America Corporation (BAC) said on Tuesday that it would develop a program to simplify its modified mortgages disclosure. The modified disclosure will convey straightforward key borrowing terms to customers who have agreed to a permanent mortgage modification under the government’s Home Affordable Modification Program (HAMP).
BofA initiated the disclosure program in Apr 2009 for new mortgages. The program has gradually expanded to cover credit cards and other home loan types such as reverse mortgages. BofA will start distributing a one-page statement to all customers soon.
The mortgages disclosure modification initiative by BofA follows the criticism of the banking sector which failed to disclose adequately the risks and terms of some loans to borrowers during the housing boom.
Since Jan 2008, BofA has serviced 14 million U.S. mortgages and modified 615,000 mortgages under government-backed and private programs.
Temporarily, about 160,000 BofA customers have had mortgages modified under HAMP. The disclosure program by BofA now covers 95% of its home loan offerings.
BofA’s third quarter loss came in at 26 cents per share, substantially worse than the Zacks Consensus estimated loss of 10 cents. This compares unfavorably with earnings of 15 cents per share in the prior-year quarter.
Though earnings benefited from the profit from its wealth management business, the company experienced continued net interest yield compression and credit quality deterioration.
However, BofA is now absolutely free from pay restrictions after it recently repaid the entire $45 billion bailout money it had received from the TARP. We anticipate continued synergies from the company’s large scale operation and balance sheet restructuring.
On Tuesday, the shares of BofA closed at $15.12 on the New York Stock Exchange, down 1.1% from last day’s closing price.
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