Courtesy of The Sun Sentinel
March 11, 2010
Bank of America lost out on a role in financing a new courthouse in downtown Fort Lauderdale on Tuesday after county commissioners complained the megabank has failed to help people with troubled mortgages and unfairly jacked up credit card fees.
"I don't think that bad behavior should be rewarded," said Commissioner Lois Wexler, who joined with Commissioner Stacy Ritter in moving to ice out Bank of America.
Bank of America had been in line to be one of five co-managers on underwriting $208 million in bonds to finance part of the courthouse project. The commission agreed earlier this year to replace the central section of the main courthouse that has been plagued by severe maintenance problems.
The county's financial staff initially recommended Bank of America and the other firms from a list of previously approved underwriting firms. They made the recommendations based on their experience underwriting deals financed the same way as the courthouse plans.
Broward's decision comes on the heels of a similar one made last November by the city of Sunrise. City commissioners backed away from hiring Bank of America's Merrill Lynch division to help sell up to $103 million in bonds out of concerns about its mortgage practices.
Thousands of South Florida borrowers are seeking loan modifications — and not getting them. More than 434,000 home mortgages in Florida were past due at the end of last year, but fewer than 15,000 Floridians so far have gotten permanent loan modifications from any lender through the Obama administration's Making Home Affordable program.
Big banks, particularly Bank of America, have been under fire for being slow to respond to the federal government efforts to help people who are underwater on their mortgages. Critics have been charging that the banks' mortgage operations delay refinancing and short sales, and steer homeowners into new mortgages with onerous terms.
Among the newspaper articles that commissioners cited in dropping Bank of America was a report last week in the Orlando Sentinel that Bank of America trails other major lenders in resolving troubled home loans. They also referenced a St. Petersburg Times story from February about Bank of America foreclosing on the wrong house.
According to information from Bank of America, the bank has helped more than 700,000 customers with loan modifications and has picked up the pace of approving them this year. The bank has said unemployment and homeowners' debt compared with their income remain big obstacles.
"There seems to be an insensitivity to the fact that people are hurting," Ritter said.