Bank of America Names Ron Sturzenegger Head of Unit Managing Foreclosures
Bank of America Corp. (BAC), the biggest U.S. lender, named Ron Sturzenegger to stanch losses at its unit managing about $1 trillion of shaky or soured home loans after Terry Laughlin was promoted to chief risk officer.
Sturzenegger, 51, formerly global leader for the bank’s real estate and gaming corporate and investment banking unit, reports to Chief Executive Officer Brian T. Moynihan as head of legacy asset servicing, according to a memo sent to employees today. Laughlin starts as chief risk officer immediately, said the Charlotte, North Carolina-based bank, which announced his promotion last month.
Moynihan, 51, is reshuffling his executives amid investor concern about the rising cost of faulty mortgages acquired in the 2008 takeover of Countrywide Financial Corp. In February, the bank segregated about half of its loans into the legacy unit, then run by Laughlin, who said managers were creating a “classic good bank, bad bank structure.” Bank of America has lost almost half its market value this year.
“Ron is a proven leader who brings deep credibility and expertise in real estate to the Legacy Asset Servicing team,” Moynihan said in the memo. “Terry has served our company and our shareholders ably in an important assignment, and he will continue to do so as chief risk officer.”
Billing, Collections, Foreclosures
Bank of America is the biggest U.S. servicer of home mortgages, a business that handles billing, collections and foreclosures. The legacy unit services about 7 million loans that are either delinquent, defaulted or considered susceptible to failure, with roughly $1 trillion in unpaid balances, said Dan Frahm, a bank spokesman.
Laughlin, 56, has run the legacy assets business for less than a year, having been named to the post in February when the unit was created. He left his job as CEO of Pasadena-based OneWest Bank and joined Bank of America a year ago.
During his tenure, Laughlin helped Moynihan negotiate about $13 billion in settlements with buyers and insurers of bonds containing defective mortgages, including deals with Fannie Mae and Freddie Mac, Assured Guaranty Ltd. and a group of institutional investors.
Bank of America is in talks to resolve state and federal probes of shoddy foreclosure practices that may cost the industry more than $20 billion, people with knowledge of the negotiations have said. A settlement is probably still weeks away, said one person.
Paula Dominick, who served as interim chief risk officer, returns to her role as global compliance executive, according to the memo.
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