As one of the world’s largest financial institutions, the firm’s results have been rocked by instability in the mortgage market. Integrated the former Countrywide into the firm has proved a challenge, as sub prime mortgages have continued to sour in the past year. The goal of the new division will be to make retention specialists available to meet face to face with financially troubled mortgage customers having difficulty with making their monthly payments.
Glenda Gabriel, Neighborhood Lending executive for Bank of America Home Loans commented: “While we have already assisted 13,000 Massachusetts homeowners with permanent modifications since January 2008, we recognize the need for additional outreach efforts in the area.”
The Dedham location will likely serve as a launching point in the New England region, as the firms strives to limit the amount of bad loans in their portfolio, and increase homeowner retention. The bank is participating in the federal government’s Making Home Affordable program, and also other modification agreements to customers to help avoid foreclosures.
If successful, this grass roots model may be embraced by competing institutions like Citigroup (NYSE: C) and JPMorgan Chase (NYSE: JPM) also trying to stem loan losses. The losses have mounted for firms in the past two years, and homeowner retention is far preferred to repossession, as the glut of supply on the open market often makes these home worth less than the value left on the mortgage, causing significant write-offs.
