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Bank of America faces massive $13 billion RMBS claim

Bloomberg cites coming DoJ settlement

Bank of America
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Bloomberg reports that Bank of America (BAC) is facing what could be the largest resolution claim on residential mortgage backed securities issued during the housing boom.

The loans involve issues related to problematic mortgage originator Countrywide, which BofA now owns.

The settlement would come on top of the $9.5 billion the bank agreed last month to pay to resolve Federal Housing Finance Agency claims, said two people who asked not to be named because the negotiations are private.

A deal could come within the next two months, the people said.

If the Justice Department gets its way, the case against Bank of America will eclipse JPMorgan Chase & Co.’s (JPM) record $13 billion global settlement over similar issues in November. That settlement, which included a $4 billion agreement with the FHFA, encompassed loans JPMorgan took over with its purchases of Washington Mutual Inc. and Bear Stearns Cos.

According to the Bloomberg article, BofA spent more than $50 billion so far to resolve claims related to mortgage operations before 2009.

Source: Bloomberg
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