Banks offer grim look at home loan industry
The nation's leading consumer banks gave a grim assessment of the mortgage industry today in testimony on Capitol Hill. Chief among them was Bank of America's head of home loans who said a "considerable number of customers" will lose their homes in the next two years. Hundreds of thousands of Bank of America customers haven't made a mortgage payment in more than a year. And more than a million others are at least two months behind in their payments. Only a small fraction of Bank of America customers have had their mortgages modified to make payments more affordable. That was the gist of testimony today by Barbara Desoer, president of Bank of America Home Loans. The House Financial Services committee called for testimony from Desoer and representatives from Wells Fargo, Citi and JP Morgan Chase as it looks at the effectiveness of the Home Affordable Modification Program, or HAMP. Desoer told the committee Bank of America has only modified 33,000 loans permanently. But she partly blamed that figure on customers. She says Bank of America has offered to modify nearly 400,000 loans, but customers have failed to accept those offers or submit correct paperwork.