Bank of America Creates Foreclosure Unit with 30,000 Employees

If you want to know just how serious Bank of America’s distressed mortgage problem is, here’s a number you can put on it: 30,000.  That’s how many employees will work under the bank’s new “Legacy Asset Servicing” unit, according to a Reuters report released on Feb. 4th.

This shows just how serious the country’s foreclosure problem is:

“This is a significant step.  If Bank of America has these issues, what kind of problems does everyone else have?” said Matt McCormick, a Cincinnati-based portfolio manager at Bahl & Gaynor Investment Counsel Inc.

Current BofA credit loss mitigation executive Terry Laughlin will head the unit as the company’s new “foreclosure and loan modification czar.”  Sounds like a U.S. Cabinet position, doesn’t it?

The article hints at possible restructuring (downsizing?) at the nation’s largest bank:

Employees will be reassigned to other divisions within home loans, and those who have not been moved will be able to apply for new posts.

Apply for new posts?  That sounds a lot like being laid off.  Considering that Bank of America also announced on Friday that it is leaving the reverse mortgage business, it would seem that even more bank employees might be without a job.  Could this all be due to company fears that it might be on the hook to buy back toxic mortgages sold to investors?  Could it be due to the impending Wikileaks “megaleak” aimed at “a major U.S. bank?”

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