BoA Says Loan Buybacks Could Cost $10 Billion
BoA Says Loan Buybacks Could Cost $10
Billion
Bank of America Corp. said Friday that outstanding claims related to bundled mortgage securities it sold could cost the bank $7 to $10 billion, far more than the $4.1 billion it set aside in the fourth quarter.
The nation's largest bank in terms of assets, BoA has been fighting accusations that it tricked mortgage investors into buying loans issued with exaggerated property valuations and borrowers' incomes. The final cost of these claims will depend on legal and procedural hurdles investors must go through to make the bank repurchase the loans.
The bank's $4.1 billion reserve fueled a fourth-quarter loss and exceeded the $3 billion bank officials announced on January 3rd would be needed to settle disputes with mortgage giants Fannie Mae and Freddie Mac. Resolving the many disputes with private investors could take years, according to bank executives.
Bank of America Corp. said Friday that outstanding claims related to bundled mortgage securities it sold could cost the bank $7 to $10 billion, far more than the $4.1 billion it set aside in the fourth quarter.
The nation's largest bank in terms of assets, BoA has been fighting accusations that it tricked mortgage investors into buying loans issued with exaggerated property valuations and borrowers' incomes. The final cost of these claims will depend on legal and procedural hurdles investors must go through to make the bank repurchase the loans.
The bank's $4.1 billion reserve fueled a fourth-quarter loss and exceeded the $3 billion bank officials announced on January 3rd would be needed to settle disputes with mortgage giants Fannie Mae and Freddie Mac. Resolving the many disputes with private investors could take years, according to bank executives.
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