Friday, March 11, 2011

BofA under fire over execs home-loss subsidies

Bank of America Corp. is fighting an effort to force U.S. banks to reduce the amount some borrowers owe on their mortgage. But property records show that the bank was willing to take one heck of a hit when mortgage chief Barbara Desoer unloaded her Charlotte N.C., home in 2009 as part of a move to California.

Desoer and her husband Marc sold their 4,455-square-foot house in Charlotte’s exclusive Eastover neighborhood to relocation company Weichert Relocation Resources Inc. for $1.46 million on May 6, 2009, according to county property records.

Eastover is a highly sought-after address in Charlotte, can be seen from the giant bank’s downtown headquarters and is home to former Bank of America Chief Executive Hugh McColl and other bank executives.

The relocation company’s services were part of a larger benefits package that Desoer got so she could oversee the purchase of troubled mortgage lender Countrywide Financial.

Bank of America also paid out $1.5 million for costs related to the purchase of her new home in California and $1.1 million in tax costs, according to a 2009 securities filing.

The fine print included a promise by Bank of America to eat any losses if Desoer’s house in Charlotte was sold at a lower price.

On Nov. 20, 2009, Weichert sold it for $930,500–a 36% decline in just six months, property records show. Bank of America’s loss: roughly $533,500.

“It’s simply unfair and inaccurate to compare this benefit to principal reduction for delinquent mortgage customers,” Bank of America said in a statement. “Relocation benefits are customary and competitively necessary arrangements for most major companies when executives are asked to relocate with their family to another area of the country to oversee critical businesses.”

The company hasn’t disclosed the size of the bath it took on Desoer’s house. In the 2009 securities filing, Bank of America said the sale happened in December 2008 and was “based on the average of the appraised values of the residence as determined by two independent appraisal services.”


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