Committed to Modify $40 Billion of Loans.(Viewpoint)

Byline: Michael Gross

Mr. Gross is managing director for loan administration and loss mitigation at Bank of America. His viewpoint is an excerpt from his recent congressional testimony before the House Financial Services Committee.

Let me start by saying that our goal is to modify and workout at least $40 billion in mortgages by the end of 2009, and keep all those families in their homes.

I also want to congratulate the chairman and this committee on the vital housing legislation that the House approved on Wednesday. This legislation will be important to the long-term viability of home financing and the short-term stability of the housing market. We believe it will help both homeowners and potential homeowners alike.

We know that consumers who are experiencing financial challenges, but who ultimately have the ability to repay their loans, often need our help to stay in their homes. We are ready to help them. We do so because no one benefits from a foreclosed home. At the core of our combined operations are the substantial commitments we made to use responsible mortgage lending practices and to engage in aggressive loss mitigation efforts to help borrowers avoid foreclosures and remain in their homes. Bank of America is devoting substantial resources to modifying and working out loans for borrowers who are facing default and possible foreclosure.

We are continuing many effective home retention practices already in place, improving and supplementing these practices where we can, including robust processes for identifying and contacting at-risk customers in need of assistance, special strategies for subprime borrowers holding hybrid adjustable rate mortgages, and refinancing loan modification and other restructuring tools that make the borrower's debt affordable. We will continue to work with investors, the GSEs, regulators and community partners to identify ways to improve our ability to reach customers with affordable home retention solutions. We are devoting substantial human and financial resources to these important tasks. As previously noted, through focused effort and determination, by the end of 2009 Bank of America believes we can successfully modify or workout at least $40 billion in troubled mortgage loans - helping over a quarter million customers remain in their homes.

We are tailoring our ...