A nationwide coalition of state pension funds are asking the nation’s biggest banks once again to “immediately” begin examinations of their mortgage and foreclosure practices through corresponding in-house Audit Committees.
In an announcement yesterday, New York City Comptroller John Liu, who represents the City’s five pension funds, is asking for the boards of directors for Bank of America (BofA), Citigroup, JPMorgan Chase, and Wells Fargo to “launch independent examinations of their loan modifications, foreclosure, and securitization policies and procedures.”
The pension fund group, which includes the Connecticut Retirement Plans and Trust Funds, the Illinois State Universities Retirement System, the New York State Common Retirement Fund, the North Carolina Retirement Systems and the Oregon Public Employees’ Retirement Fund, round out the coalition of retirement plan assets worth more than $432 billion.
Previously, in November, Liu’s office and the state pension funds made a similar request for the four banks to internally initiate the audit on behalf of the shareholder group. At the time, the City CFO highlighted that banks represent about 56% of the nation’s $10.64 trillion mortgage industry. The call requests that they post their findings to shareholders by Sept. 30, 2011; it will be voted on between April and May.
As a result, Liu noted that the banks face “potential losses of $26 billion” or higher.
Recently, however, the announcement revealed that the pension fund group’s holdings were about $1.3 billion in Bank of America shares, $1.1 billion in Citigroup shares, $1.7 billion in JPMorgan Chase shares and $1.6 billion in Wells Fargo shares, the Jan. 9 press release noted.
“This will help to prevent future compliance failures and restore the confidence of shareholders, regulators, legislators and mortgage markets participants,” the coalition advised in its Jan. 6 letter, while noting that the resolution is being submitted in time for the companies’ Spring 2011 annual meeting.
As a response, Rick Simon, a spokesperson for Bank of America Home Loans, said in an e-mail Monday that “the letter from the pension funds appears to bring up a concern that the bank is already addressing.”
He explained that BofA utilized the services of “external auditors” in its October/November review of “foreclosure processes” that led to introducing process enhancements and resuming foreclosures last month.
Alternately, a spokesperson from JPMorgan Chase declined comment Monday morning. Also, previously, Wells Fargo and Citigroup declined comment on the matter as well.