B. of A. near $8.5 bln mortgage settlement: WSJ
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B. of A. near $8.5 bln mortgage settlement: WSJ
by JonlyBonly Tue Jun 28, 2011 8:02 pm
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June 28, 2011, 7:03 p.m. EDT
B. of A. near $8.5 bln mortgage settlement: WSJ
By MarketWatch
SAN FRANCISCO (MarketWatch) — Bank of America Corp. is close to a deal to pay $8.5 billion to investors that lost money on holdings of mortgage-backed securities in the wake of the U.S. housing-market downturn, the Wall Street Journal reported late Tuesday.
The size of the payment would be the biggest such settlement ever for a mortgage lender, and larger than all of the profits earned by the Charlotte, N.C.-based company since the financial crisis erupted in 2008, the Journal said. CNBC also reported that a deal was near.
A deal would end a nine-month fight between Bank of America /quotes/zigman/190927/quotes/nls/bac BAC +1.11% and 22 investors that collectively hold more than $56 billion in disputed mortgage-backed securities, including money manager BlackRock Inc. /quotes/zigman/249424/quotes/nls/blk BLK +1.17% , insurer MetLife Inc. /quotes/zigman/252112/quotes/nls/met MET +0.62% and the Federal Reserve Bank of New York.
These large investors alleged that securities purchased from Countrywide Financial Corp. before the financial crisis were laden with lousy mortgages, in contrast to the assurances buyers received about the quality of the debt and the collateral behind it. The investors also said Countrywide, which Bank of America acquired in 2008 for $4 billion, also failed to keep accurate records while managing the loans.
Bank of America’s board is required to approve any settlement and met on Tuesday to discuss it, the Journal added.
Shares of B. of A. rose more than 2% in after-hours trading Tuesday following the report.
Separately, reports of mortgage-loan fraud climbed 31% as large mortgage lenders conducted additional reviews after receiving demands to repurchase poorly performing mortgage loans, the Treasury’s Financial Crimes Enforcement Network said Tuesday.
“A substantial majority of reports involved activities which occurred in 2006-07, an indication that the industry is slowly making its way through the most problematic mortgages,” FinCEN Director James H. Freis Jr. said in a statement.
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June 28, 2011, 7:03 p.m. EDT
B. of A. near $8.5 bln mortgage settlement: WSJ
By MarketWatch
SAN FRANCISCO (MarketWatch) — Bank of America Corp. is close to a deal to pay $8.5 billion to investors that lost money on holdings of mortgage-backed securities in the wake of the U.S. housing-market downturn, the Wall Street Journal reported late Tuesday.
The size of the payment would be the biggest such settlement ever for a mortgage lender, and larger than all of the profits earned by the Charlotte, N.C.-based company since the financial crisis erupted in 2008, the Journal said. CNBC also reported that a deal was near.
A deal would end a nine-month fight between Bank of America /quotes/zigman/190927/quotes/nls/bac BAC +1.11% and 22 investors that collectively hold more than $56 billion in disputed mortgage-backed securities, including money manager BlackRock Inc. /quotes/zigman/249424/quotes/nls/blk BLK +1.17% , insurer MetLife Inc. /quotes/zigman/252112/quotes/nls/met MET +0.62% and the Federal Reserve Bank of New York.
These large investors alleged that securities purchased from Countrywide Financial Corp. before the financial crisis were laden with lousy mortgages, in contrast to the assurances buyers received about the quality of the debt and the collateral behind it. The investors also said Countrywide, which Bank of America acquired in 2008 for $4 billion, also failed to keep accurate records while managing the loans.
Bank of America’s board is required to approve any settlement and met on Tuesday to discuss it, the Journal added.
Shares of B. of A. rose more than 2% in after-hours trading Tuesday following the report.
Separately, reports of mortgage-loan fraud climbed 31% as large mortgage lenders conducted additional reviews after receiving demands to repurchase poorly performing mortgage loans, the Treasury’s Financial Crimes Enforcement Network said Tuesday.
“A substantial majority of reports involved activities which occurred in 2006-07, an indication that the industry is slowly making its way through the most problematic mortgages,” FinCEN Director James H. Freis Jr. said in a statement.
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