CHARLOTTE, N.C.:'' Bank of America Corp said it is fighting various lawsuits involving roughly $54 billion in mortgage-backed securities, where investors allege it misrepresented the quality of the underlying home loans.
The largest U.S. bank by assets had put the figure at more than $375 billion in a securities filing issued earlier on Friday Nov 5, but later issued a statement slashing the figure in light of a Thursday court ruling in California.
The cases are part of a growing legal push by investors to force U.S. banks to rebuy billions in delinquent mortgages.
The California court ruled on Thursday to limit the number of mortgage-backed securities offerings at issue in a proposed class action case from $352 billion to $31 billion.
Investors have been asking courts to certify class-action cases, alleging banks made material misstatements and cut corners in creating the mortgages.
The suits seek unspecific compensatory damages and, in some cases, a repurchase of the mortgage by the bank, Bank of America said in its filing with the U.S. Securities and Exchange Commission.
The investors are asking for the loans to be repurchased at their initial value, with the lenders' eating the loss.
The actual amount in dispute in BofA's litigation is likely to be lower than the initial value of the securities, due to mortgage repayments, collateral held against the loans and borrowers who have partially paid off their mortgages.
Separately, the bank it expects its foreclosure costs to rise in fourth quarter 2010 and 2011, in part because of new standards imposed in the wake of a public outcry over so-called "robo-signers," who signed thousands of foreclosure documents without fully reviewing the cases.
In October, BofA halted foreclosures in all 50 states, as it reviewed its processes for any faults that could have caused improper foreclosures.
The bank has made changes to its systems, and since resumed filing 102,000 foreclosure affidavits in 23 states, while the halt is still in effect in 27 others.
A coalition of all 50 U.S. state attorneys general is probing the industry's practices, along with various other U.S. regulatory and congressional probes of the matter.
Bank of America said in Friday's filing that the changes to its foreclosure system will result in higher noninterest and legal expenses, and increased servicing costs.
The bank said it may also become the subject of added regulatory and legal scrutiny over foreclosures it has already completed, in addition to the probe of on-going seizures. - Reuters
The largest U.S. bank by assets had put the figure at more than $375 billion in a securities filing issued earlier on Friday Nov 5, but later issued a statement slashing the figure in light of a Thursday court ruling in California.
The cases are part of a growing legal push by investors to force U.S. banks to rebuy billions in delinquent mortgages.
The California court ruled on Thursday to limit the number of mortgage-backed securities offerings at issue in a proposed class action case from $352 billion to $31 billion.
Investors have been asking courts to certify class-action cases, alleging banks made material misstatements and cut corners in creating the mortgages.
The suits seek unspecific compensatory damages and, in some cases, a repurchase of the mortgage by the bank, Bank of America said in its filing with the U.S. Securities and Exchange Commission.
The investors are asking for the loans to be repurchased at their initial value, with the lenders' eating the loss.
The actual amount in dispute in BofA's litigation is likely to be lower than the initial value of the securities, due to mortgage repayments, collateral held against the loans and borrowers who have partially paid off their mortgages.
Separately, the bank it expects its foreclosure costs to rise in fourth quarter 2010 and 2011, in part because of new standards imposed in the wake of a public outcry over so-called "robo-signers," who signed thousands of foreclosure documents without fully reviewing the cases.
In October, BofA halted foreclosures in all 50 states, as it reviewed its processes for any faults that could have caused improper foreclosures.
The bank has made changes to its systems, and since resumed filing 102,000 foreclosure affidavits in 23 states, while the halt is still in effect in 27 others.
A coalition of all 50 U.S. state attorneys general is probing the industry's practices, along with various other U.S. regulatory and congressional probes of the matter.
Bank of America said in Friday's filing that the changes to its foreclosure system will result in higher noninterest and legal expenses, and increased servicing costs.
The bank said it may also become the subject of added regulatory and legal scrutiny over foreclosures it has already completed, in addition to the probe of on-going seizures. - Reuters
No comments:
Post a Comment