April 26, 2018
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Bank of America settlements impede fraud probe, Arizona says

By From wire service reports

SAN FRANCISCO — Bank of America is impeding an investigation of its loan modification practices by negotiating settlements with borrowers who must agree to keep them secret and not criticize the bank in exchange for cash payments and loan relief, Arizona officials say.

The Arizona Attorney General’s Office is asking a court to block those aspects of the settlements and require the bank to turn over all the agreements. The bank denies any wrongdoing.

One 2011 accord involving a borrower facing foreclosure who defaulted on a $253,142 mortgage included a $5,000 payment, plus $7,500 for legal fees, and the defaulted payments were waived and the loan was modified to a 40-year term with a 2 percent interest rate, court documents show. The terms of the original loan and the borrower’s complaint about the lender weren’t described in the documents.

The borrower “will remove and delete any online statements regarding this dispute, including, without limitation, postings on Facebook, Twitter and similar websites,” and not make any statements “that defame, disparage or in any way criticize” the bank’s reputation, practices or conduct, according to documents filed in state court in Phoenix. The borrower’s name and address were reda cted.

Bank of America attorneys argue that borrowers don’t have to sign the agreements to get a loan modification and deny that settlements hinder the state’s probe. Borrowers can be subpoenaed to disclose the accords, and the Charlotte, N.C.-based bank won’t enforce the non-disparagement provision if they talk to investigators, the bank’s lawyers have said in court filings.

A hearing is set for Feb. 1 on the dispute.

Montag vows ‘new game’ for BofA investment bank as risk reduced

NEW YORK — Bank of America’s global banking and markets division is recovering after credit-rating downgrades ignited concern among clients and trading partners, says co-chief operating officer Thomas K. Montag.

Executives from the firm traveled around the world to reassure corporate clients that the Charlotte, N.C.- based company was a steady partner after Moody’s Investors Service cut the bank’s credit grades in September, Montag said in a Jan. 19 staff meeting.

Montag, 55, is under pressure to improve results after the division’s profit slumped by half last year to $2.97 billion, including two consecutive quarterly losses. Chief Executive Officer Brian Moynihan has said the business was critical to reviving income at the second biggest U.S. lender and has warned that he’ll cut costs more deeply if earnings don’t rise.

Bank of America lost market share last year to rivals including Morgan Stanley in the trading of equities, bonds, currencies and commodities, Matthew O’Connor, an analyst at Deutsche Bank, said in a Jan. 19 note. New York-based Citigroup, the third-biggest U.S. bank by assets, also has lost share since getting a $45 billion taxpayer bailout.

Vatican defends transfer of official

VATICAN CITY — The Vatican on Thursday defended its transfer of a top official to Washington after he exposed alleged corruption in the awarding of Holy See contracts.

The Vatican also warned that it could take legal action against a TV show that reported on the case. The Italian investigative news program, “The Untouchables,” showed letters from Archbishop Carlo Maria Vigano to Pope Benedict XVI begging not to be transferred after exposing corruption costing the Vatican millions of euros.

Vigano was removed in October as the No. 2 administrator of the Vatican city-state and was named the pope’s ambassador to Washington. While the job is highly prestigious, the posting took Vigano far from headquarters and out of the running for the Vatican’s top administrative job, which carries with it the rank of cardinal.

The Vatican statement said Vigano was given one of the most important roles in Vatican diplomacy, citing this as proof of Benedict’s “unquestionable respect and trust” in him.

The statement did not respond to specific allegations aired Wednesday night on the news show on the private La7 network. It criticized “questionable journalistic methods” such as revealing confidential documents and complained that information was presented “in a superficial and biased manner.”

The Holy See also said it would pursue “all opportune ways, if necessary, legal measures” to protect the reputation of Vatican officials mentioned in the program.

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