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NEW YORK (
Bank of America(BAC - Get Report) CEO Brian Moynihan received a letter on Thursday from U.S. Senator Barbara Boxer (D., Calif.) calling on the bank to end delays in refinancing applications.
In her letter, Boxer cited a
Bloomberg News on Wednesday that claims the bank has asked customers to wait 90 days before submitting a refinancing application, citing "two people with knowledge of the policy."
The reason for the delay, according to the report, is that a government program known as the Home Affordable Refinance Program, which helps homeowners lower payments, has increased refinance applications and created a backlog at Bank of America. Citing the report, Boxer states in her letter that
JPMorgan Chase(JPM - Get Report),
Wells Fargo(WFC - Get Report) and
Citigroup(C - Get Report), "have not taken steps to discourage borrowers from refinancing."
The report does not actually claim the bank is actively discouraging refinancing activity, but rather that it is simply strained beyond capacity. At the same time, it cites spokespeople from JPMorgan and Wells Fargo saying they are handling the increased activity successfully, while the Citigroup spokesman says the bank is "experiencing longer hold times but we continue to serve our customers with refinance opportunities," according to the report.
The letter from Boxer comes the same day attorneys general in 49 states and the Obama administration reached a
$25 billion settlement of a mortgage servicing investigation with the five largest servicers, including Wells Fargo, Bank of America, JPMorgan, Citigroup and
Ally Financial that aims to spur even more refinancing activity.
An email message to Bank of America spokespeople asking for a response to Senator Boxer's letter was not returned.
Written by Dan Freed in New York.
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