Mortgage review urged at Bank of America

2 advisory firms support requiring study, up for vote at bank’s annual meeting.

Excerpts from the report…

An advisory firm on Thursday backed seven out of eight shareholder proposals up for a vote at Bank of America Corp.’s annual meeting next month, including one that would require a review of mortgage operations.

In a report late Thursday, another advisory firm, Glass Lewis & Co., urged investors to vote against Rossotti and director Virgis Colbert, citing their past service on the Merrill Lynch & Co. board. Glass Lewis backed five of the eight proposals, including the mortgage review.

The mortgage proposal stems from the controversy that began last fall over “robo-signing” in which bank workers rapidly processed foreclosure paperwork without properly reviewing underlying documents. Federal regulators have reached agreements requiring banks to improve their processes, and state attorneys general continue to investigate the problem.

The proposal submitted by the New York City comptroller, on behalf of the city’s employee pension system, calls on the board’s audit committee to conduct an independent review of the company’s internal controls related to loan modifications, foreclosures and securitizations and issue a report to shareholders by Sept. 30.

“With the company’s mortgage-related practices under intensive legal and regulatory scrutiny, we believe the audit committee should act proactively and independently to reassure shareholders that the company’s compliance controls are robust,” ISS said.

ISS is backing a similar proposal before Wells Fargo & Co. shareholders next week.

You can check out the report in full here…

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