BofA to vow home loan aid

Witnesses sponsored by the San Francisco-based California Reinvestment Coalition include four borrowers complaining of frustrating delays and broken promises made by Countrywide's bureaucracy as they struggled to make payments or fell into foreclosure proceedings. One cancer patient was promised a loan modification, but a mix-up occurred on the lender's end and the home was foreclosed on anyway, coalition spokeswoman Victoria Leon Guerrero said.

"When Bank of America takes over, it will be an even bigger operation," she said. "We want assurances they will do a better job" of handling troubled loans.

McGee said he had heard about the complaints and pledged that Bank of America would improve the level of customer service so that neither the "reality [nor] the perception" of such difficulties would continue. He said the two companies had doubled their staffs dealing with troubled borrowers to 3,900 employees over the last year, a level he said would be maintained for at least another year.

He also noted that Countrywide, unlike many lenders, already was going beyond merely sending letters and making phone calls when borrowers run into trouble. After three missed payments on a sub-prime loan, Countrywide sends an employee to knock on the door of the borrower's home to try to talk over possible solutions, McGee said.

Once foreclosure proceedings begin, McGee said, Bank of America will stop adding late fees to the balance owed, and he said the bank would, when legally permitted, waive fees imposed by some mortgages when borrowers pay loans off early.

At a Fed hearing in Chicago last week, the bank said it would limit the use of prepayment penalties after the Countrywide takeover, greatly restrict loans on which borrowers don't document their incomes, and altogether eliminate sub-prime loans and mortgages that allow borrowers to pay less than the monthly interest, causing their loan balances to rise.

Helping 265,000 borrowers retain their homes over the coming two years through refinancings or by reworking loan terms would keep Bank of America at about the pace of workouts that Countrywide says it achieved early this year. The advocacy groups say they are concerned because more than half a million Countrywide borrowers face foreclosure, but McGee said many of those are speculators who don't deserve and won't receive help.