Tells Shareholders To Call Toll-free Number About Mortgage Servicing Issues
Hugh Son, Bloomberg
Bank of America Corp., the second- biggest U.S. lender, is following a “disciplined” strategy to rebuild, Chief Executive Officer Brian T. Moynihan said today as protests swirled inside and outside the firm’s annual meeting.
Moynihan, 52, presided over a contentious two-hour gathering as shareholders pressed him on complaints ranging from mortgage practices and foreclosures to customer service and political contributions. One attendee at the Charlotte, North Carolina event lamented the lost value of his shares and referred to the bank as “a felon.”
“We abide by the law every day,” Moynihan said, adding that managers are cleaning up the bank’s practices and that 50,000employees are giving borrowers “every chance” to get mortgage modifications. “I think we’re doing everything we can,” he said.
Investors and protesters from San Francisco to London have used shareholder meetings this year to denounce financial firms for making shoddy loans and overpaying executives. Bank of America’s stock has lost almost half its value since the start of 2010, when Moynihan was named CEO.
Much of the criticism stems from Bank of America’s 2008 takeover of Countrywide Financial Corp. The subprime lender has been blamed by lawmakers for fueling the housing collapse, by regulators for sloppy and discriminatory lending and by investors for driving more than $40 billion of costs tied to soured mortgages and improper foreclosures.
Mortgage Servicing
At least three speakers at the meeting told Moynihan that the bank has failed to improve mortgage servicing after years of complaints that employees gave wrong information, didn’t return phone calls and repeatedly lost paperwork.
“You’ve got to do something about your mortgage servicing,” one speaker told Moynihan. The CEO told borrowers in the hall and “everyone out there” that he personally pledged the bank would work with them. “You can call us and we will figure it out,” he said, eliciting laughter in the audience as he encouraged them to dial a toll-free number. Moynihan said 1 million modifications have been completed, “and I don’t think we could have done that without being competent.”
