According to Bloomberg, Bank of America (BAC) said the Department of Justice may file another suit tied to mortgage bonds and raised its estimate of potential losses from legal and regulatory issues by 82% to $5.1 billion.
New lawsuits could hinder CEO Brian Moynihan’s effort to end fallout from the 2008 credit crisis and purchases of Countrywide Financial Corp. and Merrill Lynch & Co. The bank has already spent more than $45 billion on litigation, settlements and refunds for investors to compensate for shoddy mortgage lending, servicing and foreclosures.
“Two months ago I would’ve thought, before all this stuff hit with JPMorgan, that we were in the 8th inning of the mortgage aftermath,” said Nancy Bush, a bank analyst who founded NAB Research LLC in New Jersey. “It’s like the slate has been wiped clean, and we’re starting all over again.”