BofA's Dismal Mortgage-Modification Rate

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Includes: BAC, JPM, OCN
by: Felix Salmon

Yet more proof, if proof be needed, of Bank of America’s dysfunctionality comes in the latest HAMP report from Treasury. BofA (NYSE:BAC) has 1,018,192 loans eligible for modification — more than twice as many as anybody else; JP Morgan Chase (NYSE:JPM) is in second place with 448,815. Of those million-plus mortgages, BofA has managed to turn the grand total of 98 into permanent modifications — a conversion rate of 0.0096%.

Elsewhere, the conversion rate is much higher: Ocwen Financial (NYSE:OCN), for instance, has 4,252 permanent conversions out of 66,351 eligible loans, for a rate of 6.4%. Even JP Morgan Chase has managed 4,302 permanent conversions, for a rate of just under 1%.

It takes time to move clients through the trial-modification process and into something permanent, of course. But it also takes competence. And that seems to be a commodity in short supply at BofA.