There has been a “dramatic reduction in 60-day delinquencies which has allowed us to bring down the costs,” Moynihan said during a presentation at a Goldman Sachs financial services conference Tuesday.
He pointed out that the number of delinquent mortgages dropped to less than 400,000 as of Sept. 30, down from 900,000 a year ago.
It took 58,000 employees to service those loans in the summer of 2012. Now B of A’s legacy asset servicing unit has just 27,600 employees. And legacy asset servicing expenses have been reduced by nearly $1 billion from 4Q 2012 to $2.2 billion in the recent third quarter.
That reduction in expenses will be a significant “difference for us in 2014,” Moynihan said.
The CEO is also looking forward to working through all remaining legacy representation and warranty claims and other litigation facing B of A in 2014.
Bank of America has already paid $43 billion in reaching settlements and agreements with Fannie Mae, Freddie Mac, federal regulators and others.
The Charlotte, N.C.-based bank estimates that remaining R&W claims could cost up to $4 billion and other litigation could cost another $5 billion. B of A currently has $14 billion in reserves to cover those losses.