Wednesday, November 6, 2013

Bank of America CEO calls housing market 'fairly stable'

Bank of America CEO Brian Moynihan said Wednesday that the U.S. housing market is “fairly stable” and recent declines in mortgage refinancing activity are not indicative of the sector's overall strength, The Wall Street Journal reports

Moynihan spoke during an event hosted by the paper. He discussed other topics, including the Charlotte-based bank's legal troubles and consumer spending.

Like other banks, Bank of America has seen a slowdown in consumer demand to refinance as mortgage rates have risen this year. The bank, like other lenders, has announced layoffs in connection with the dip in refinancing activity. On a third-quarter earnings call, the bank's chief financial officer said the bank expects to cut more jobs as its refinance business continues to shrink.

Moynihan said home purchases, which have risen since the beginning of the year, spur broader economic activity. Despite the recent partial government shutdown, consumer spending has been strong, he said.

Regarding the bank's legal woes, Moynihan said it has spent more than $40 billion to clean those up. But the bank still faces a slate of lawsuits and legal claims that could add up to billions more in costs. Last week, the bank disclosed that the U.S. Department of Justice might file a lawsuit over mortgage bonds.

Moynihan would not say whether he thinks the government is unfairly “shaking down” large banks by penalizing them for practices that led to the financial crisis.

“What’s fair and unfair is a debate I have at 10 o’clock at night by myself,” he said.