Protestors interrupted Bank of America Corp.'s chief executive Brian Moynihan during an investor presentation Thursday, shouting "Bust Up Bank of America!" and, curiously, "It's International Women's Day."
Moynihan made a wry transition back into his talk: "As I was saying…" The audience at the Citigroup 2012 Financial Services Conference laughed and burst into applause.
The CEO praised the $25 billion settlement with federal regulators and state attorneys general announced in late January, saying the payout by B of A and five other mortgage servicers would help stabilize the housing market and the economy.
"The mortgage process is healing," Moynihan said. "These are all part of the settlements to help the mortgage market going forward."
When asked about the settlement's impact on banks, Moynihan responded: "When you ask how a $25 billion settlement could be good, I agree with you. But it's a symbol, a chance to get everyone to agree to solve this."
The Obama administration had made a number of changes to the Home Affordable Refinance Program and other mortgage relief programs that Moynihan said would allow the market to recover, albeit slowly.
"You heard the president speak about this. There's a strong, clear view that if we help move the process along, the amount of people that we can help may be limited …but this thing is healing, it will be slow, let's not kid ourselves, but it is healing."
B of A is modifying about 50,000 loans each quarter and taking about 1,500 refinance applications a day, he said.
"The way we get through it is to help customers and lower their payments which will help stabilize markets," he said. "It's a lot of hard work and it's tragic for the consumer and this settlement clarifies things."
The third-largest mortgage lender has been deluged with refinance applications and Moynihan said the bank has backtracked from a plan announced
"We made some noise by saying non-customer refinance applications would be put at the back of the bus," he said. That change no longer applies.
Moynihan said the bank is on track to continue slashing expenses through "New BAC Two," its second round of expense-cutting. To that end, B of A announced in the fourth quarter that it would cut 7,000 jobs.
"You're seeing month by month the headcount that will produce savings going forward," he said. "Overall, less branches every quarter, less people in the system, moving to automation …my experience is if you do it too fast it takes you longer to recover."
The bank has roughly 45,000 employees helping mortgage borrowers and Moynihan said those numbers will be reduced in the next few years.
"We continue to work to resolve legacy mortgage issues," he said. "We still see slow economic growth and housing issues. It's about controlling expenses."
