Loan Modification

The backlog of foreclosures that have not yet cleared in terms of title continues to grow, even as the industry ramps up operationally to deal with the surge. The BAC earnings call this week provides considerable color on the timing of the peak of the operational build in terms of servicing capacity 3-4 quarters out -- at a minimum.

A good bit of what was said on the BAC call this week was contradictory and reflects confusion by BAC management. This confusion is understandable given the dramatic situation facing BAC and the likelihood that its growing list of creditors may soon force the issue. Part of the reason you heard BAC management spend so much time talking about loan servicing issues is the need to manage expectations of investors.