Bank of America CEO Talks about Bank Repo Homes

The chief executive of the country's biggest consumer bank spoke at the annual conference of the National Urban League in Chicago and clarified many things said about the role of the banking industry in the housing crisis and in the rising number of bank repo homes.

Kenneth Lewis, CEO of North Carolina-based Bank of America, downplayed the popular view that the big banks are apathetic about the needs of consumers and to the situations of homeowners whose houses are at great risk of becoming bank repossessed homes.

Lewis pointed out that he, as head of the biggest bank in the U.S., knows what is going on across the country. He predicted that the country?s recession will end in the last months of 2009, but the 9.5-percent employment rate will continue to rise in the coming months, even up to 2010.

The CEO also reiterated that the banking industry should not be blamed solely for the record numbers of bank repo homes that continue to plague many parts of the country.

He explained that banks deserve some of the blame, but that all blame should not be directed towards the banking industry. He said that unregulated investment banks, hedge funds, mortgage brokers and lenders deserve more of the blame.

Bank of America is considered the country?s biggest consumer lender based on assets, but it cut down its consumer and small business lending sharply when the housing market collapsed and large numbers of bank repo homes arose.

In the bank?s financial report for its second quarter, consumer loans declined by three percent compared to its previous quarter, and commercial loans dropped by 2 percent.

But bank officials said they have provided a total of $211 billion in loans in the second quarter, an increase from the $183 billion extended in the first quarter.

Lewis also said that his bank modified nearly 150,000 home loans and has provided around $400 billion in loans in the first 6 months.

Based on Treasury Department data, the bank, which received a total of $45 billion in bailout funds, and other big banks increased their lending in the second quarter despite a decline in total U.S. lending.

As a word of advice to his colleagues, Lewis called on other banks, mortgage lenders and servicers to intensify their loan modification activities in order to help more American homeowners prevent their houses from becoming bank repo houses.

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