December 1, 2009

WASHINGTON, DC – In an effort to bring much needed assistance to Nevada homeowners who are struggling with their mortgages, Nevada Senator Harry Reid sent a letter to Bank of America urging the bank to direct more resources toward Nevada.

“As President of B of A’s mortgage division, which is one of the largest mortgage servicers by volume operating in Nevada, I trust you are aware of the severity of the foreclosure crisis in my state. Nevada continues to lead the nation in foreclosure rates, home prices continue to decline, and nearly two-thirds of mortgage borrowers are in a negative equity position.”

Senator Reid continued with suggestions for how Bank of America could address some of the problems that Nevadans are having with the institution.
 
“First, I request that B of A devote specific employees to represent the company in cases before Nevada’s Foreclosure Mediation Program. A familiarity with the program and its mediators will create a consistency that should make the process more productive for the company as well as participating home owners. Second, I request that B of A establish and locate an assistance center in Nevada, appropriately staffed with mortgage servicing and modification experts, to interface with its Nevada customers”

Text of the letter to Bank of America follows:

Ms. Barbara Desoer
President
Home Loans and Insurance Services
100 North Tryon Street
Charlotte, North Carolina 28255

Dear Ms. Desoer:

           I am writing today to request that Bank of America devote substantially more resources to assisting your customers who are Nevada home owners struggling with their mortgages.

           As President of B of A’s mortgage division, which is one of the largest mortgage servicers by volume operating in Nevada, I trust you are aware of the severity of the foreclosure crisis in my state. Nevada continues to lead the nation in foreclosure rates, home prices continue to decline, and nearly two-thirds of mortgage borrowers are in a negative equity position.

           To help mitigate the impacts of these challenges on Nevada constituents, I have added staff in my state offices to assist Nevada home owners seeking mortgage modifications from their lenders or servicers. To date, this assistance is focused on putting Nevadans in touch with a point of contact at the mortgage-servicing companies. At the time of this writing, almost 40 percent of this type of cases in my Las Vegas office relates to mortgages serviced by Bank of America, which is in part a reflection of your company’s presence in Nevada but perhaps also an unfortunate indication of the difficulties your Nevada customers have encountered when approaching B of A for relief.

In too many instances where my staff connects a constituent with a B of A employee to discuss a modification, the constituent later reports that B of A failed to be of any assistance. I also receive reports that constituents who were denied a mortgage modification often do not receive any explanation for the denial. Additionally, the state of Nevada’s “Foreclosure Mediation Program,” authorized by the legislature this year, has had very limited success when B of A is involved. Out of the eight total mediations involving B of A, seven resulted in the mediator’s conclusion of “bad faith” on the part of the B of A representative.

I appreciate the significant burden that the foreclosure crisis has placed on your servicing division, but I suggest your Nevada mortgage customers, Nevada’s housing market and, indeed, your company’s reputation will all suffer more unless more of B of A’s resources are directed to our state. B of A’s participation in the Obama Administration’s Home Affordable Modification Program demonstrates its commitment to helping address the foreclosure problem, but – simply put – B of A must do more.

First, I request that B of A devote specific employees to represent the company in cases before Nevada’s Foreclosure Mediation Program. A familiarity with the program and its mediators will create a consistency that should make the process more productive for the company as well as participating home owners. Second, I request that B of A establish and locate an assistance center in Nevada, appropriately staffed with mortgage servicing and modification experts, to interface with its Nevada customers. Such a center should be justified in light of the peculiar impact the housing crisis has had on Nevada and the company’s shortcomings to date in dealing with your Nevada customers affected by it. In fact, other lenders have opened such homeownership centers in cities hardest hit by the housing crisis, including Las Vegas. These centers tend to improve the experience for home owners discussing their options with lenders and also should improve ultimate outcomes for the parties involved.

           Please give consideration to these requests, and I look forward to your response.
My best wishes to you.

Sincerely,
                                              
 HARRY REID
United States Senator
Nevada