The largest financial exchange traded fund was up nearly 1% ahead of Tuesday’s opening bell along with key holding Bank of America (NYSE: BAC) following reports the lender significantly hindered a federal review of its foreclosures.

B. of A. was slow in handing over data and offered incomplete information, according to the U.S. Department of Housing and Urban Development inspector general’s office, which conducted the review, Bloomberg reported.

The lender delayed the review of its foreclosures on loans insured by the Federal Housing Administration, according to the report.

Separately, B. of A. may book a further $27 billion in housing-related losses, Sanford Bernstein analysts said.

Financial Select Sector SPDR Fund (NYSEArca: XLF) rose 0.7% in premarket trade. The sector ETF is down about 6% for 2011.

The fund gained 1% on Monday as a late-day bounce in bank stocks carried the S&P 500 to a slight gain.

Financial Select Sector SPDR Fund

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.