Banks try to adopt mortgage settlement rules
Bank of America holds its annual shareholder’s meeting in Charlotte today. Shareholder pressure is about CEO pay, but also about struggles in the housing market.
Jeremy Hobson: Well in Charlotte, N.C., today, Bank of America holds its annual shareholder meeting. And as Marketplace's John Dimsdale reports, the atmosphere inside probably won't be pretty.
John Dimsdale: Bank of America’s stock price has dropped nearly 40 percent since shareholders last met a year ago.
Bank analyst Paul Miller of FBR Capital says B of A is still having trouble swallowing the bad mortgages it inherited in the 2008 takeover of Countrywide Financial.
Paul Miller: I don’t think anybody understood how bad these mortgages were. And they’ve now spent well over $20 billion on various litigations, which has really really hurt 'em hard.
B of A is hoping a $25 billion big-bank settlement with state and federal governments, signed last February, will help put its subprime mortgage woes behind it. The bank has started contacting more than 200,000 customers who may be eligible for a break on their mortgages.
Joseph Smith is the settlement’s official monitor. He says the banks are helping struggling homebuyers reduce their mortgage payments and avoid foreclosure. But, that takes time.
Joseph Smith: The businesses of these banks will be healthier as a result of what we’re doing now.
Smith expects to issue the first progress update on the settlement this fall.
In Washington, I'm John Dimsdale for Marketplace.