Part of the reason why analysts view the bank’s foreclosure and REO timeline management as average is because currently “more than half of the Bank's potential foreclosure referral population is on hold.”
Even though Bank of America operates an attorney management program that includes onsite visits, desktop reviews and quarterly financial reviews of attorney firms, these loans will not be referred to foreclosure until specific issues including “bankruptcy, state legislation, collateral documents, litigation, or investor moratoriums, are resolved,” analysts wrote.
As primary servicer, the bank was rated at SQ2- for prime loans, at SQ3+ for subprime loans, at SQ2 for second lien loans, and at SQ3 as special servicerof residential mortgage loans.
The overall rating is almost the same as the last Moody’s reading in 2012. Nonetheless, at A3, Bankof America, N.A., earned a higher rating than its parent company Bank of America Corporation, which maintains a long-term rating of Baa2 on negative outlook.
Moody’s rated B of A's collection abilities as average quoting “temporary deterioration” in the customer service group’s call center metrics in October 2012 “due to additional workload demands” that increased the average handle times for borrower calls with borrowers, as approximately 25% of its early-stage collection efforts are outsourced.
As of March 31, according to Moody’s, B of A's servicing portfolio totaled approximately 6.4 million loans for an unpaid principal balance of approximately $1.19 trillion.
Analysts rated B of A’s loss mitigation abilities at above average for prime loans and second lien loans, and as average for subprime loans.
Ratings reflect measures to expand single point of contact capabilities and “to coordinate borrower loss mitigation activities” the bank initiated in 2012.
In October 2012 Moody’s affirmed B of A’s overall primary servicer ratings at average and downgraded its special servicer rating from SQ3+ to SQ3.
Since B of A exceeded the SPOCs total to 9,000, the financial institution hired 750 concierge staff employees in its client relationship management unit designed to screen calls directed to SPOCs, and reviewed potential improvements to the bank’s proprietary iSeries servicing platform.
In addition the bank continues to reduce the size of its delinquent loan servicing portfolio both through subservicing arrangements and sales of mortgage servicing rights.