In response to government proposal of loosening mortgage standards, Bloomberg reports that Bank of America CEO Brian T Moynihan said it won’t follow. Bank of America, which paid more in legal settlements, totaling some $70 billion from law suits related to US housing collapse in 2007-2008 and its acquisition of Countrywide Financial Corp., than any other banks will avoid easing lending standards.
Moynihan said “I don’t think there’s a big incentive for us to start to try to create more mortgage availability where the customers are susceptible to default. I know that doesn’t sound good for an instant housing recovery and faster housing markets, but it’s actually good because in the long term it keeps housing more fundamentally based”.
“A customer without the means to make a down payment of at least 10 percent should consider renting rather than trying to buy a home”, Moynihan said.