The city of Sunrise on Monday removed Bank of America Merrill Lynch from its underwriting syndicate because its parent company, Bank of America NA, has come under fire in Florida for its mortgage and loan restructuring practices.
More than 450 homeowners have filed complaints with the state attorney general “about failed or stalled home mortgage loan modifications with Bank of America,” according to a recent front-page story in the Sun Sentinel newspaper.
On Monday, commissioners voted to have Goldman, Sachs & Co. replace Merrill Lynch after Mayor Roger Wishner and Commissioner Sheila Alu led discussions about difficulties people experienced working with Merrill. Alu said the bank “rudely” refused to modify her student loan, the Sun Sentinel said. Because of the difficulties, Wishner said Bank of America should not make money from Sunrise’s bond sale.
Sunrise, which is in Broward County, had selected a syndicate for the upcoming sale of $103 million of water and sewer bonds. In addition to B of A Merrill, other underwriters chosen to sell the debt were Morgan Stanley, Sterne, Agee & Leach Inc., and Raymond James and Associates Inc. The rest of the syndicate will remain in place but Goldman will replace Merrill, the City Commission decided in a near unanimous vote on Monday.
Sunrise’s capital improvement plan calls for another $250 million of water and sewer debt to be sold in fiscal years 2011 through 2014.