Bank of America CEO Brian Moynihan said the ongoing settlement talks between the federal government, state attorneys general, and the nation's largest servicers have produced a "package of programs that we believe will be very positive" for the housing market.
"The intent of those programs is to help drive the recovery in housing," he said during an earnings conference call Thursday morning.
As reported by ASR sister publication National Mortgage News on Wednesday, a settlement agreement between the parties is nearing.
However, no dollar amount has been attached to the settlement, which could be announced some time in February.
In other BofA news, the bank's residential mortgage division posted a net profit of $2.3 billion in 4Q11, but for the full year the unit bled almost $8.2 billion of red ink, according to earnings figures released Thursday morning.
The bank saw its residential fundings plunge to just $18 billion in 4Q11, a 30% decline from 3Q. All of its peers, including Wells Fargo, booked stellar production gains.
BofA is in the final throes of closing its correspondent unit, leaving it in just one production channel: retail.
The nation's largest bank also revealed that over the past year it booked an eye popping amount of mortgage-related charges – almost $30 billion worth, the largest item being a $15.6 billion set aside for “representations and warranties.” Other charges include non-interest expense ($7.3 billion) on its “legacy” servicing portfolio (a code phrase for Countrywide Financial Corp.) and a $6.3 billion set aside for mortgage-related litigation.
BofA will be a party to the pending 'robosigning' settlement with the state attorneys general.
Meanwhile, the megabank continues to see the asset value of its mortgage servicing rights decline along with its housing receivables portfolio.
At yearend BofA serviced $1.7 trillion of home mortgages compared to $1.9 trillion at Sept. 30, and $2 trillion a year ago.
It values its MSRs at just $7.4 billion compared to $14.9 billion at Dec. 31, 2010. The entire bank earned $2 billion in 4Q11 compared to a $1.2 billion loss in the 4Q10.
