Bank of America’s exposure to lawsuits over its mortgage securitization practices continues to worry analysts and investors who follow the bank. Potentially hundreds of billions worth of mortgage bonds packaged and sold by Bank of America and other institutions are expected to face challenges from large investors sitting on losses related to the bonds. The investors, which include Fannie Mae, Freddie Mac, BlackRock, Pacific Investment Management Co. monoline and private insurers, among others, are trying to put back the mortgages to the banks, arguing they are invalid due to documentation or other technical issues. Richard Bove, analyst at Rochdale Securities, believes the issue will continue for the next four to five years. “It’s going to be like a tobacco or an asbestos situation,” Bove says, arguing court battles will continue evolving for some time at plaintiffs test courts to find successful strategies and Bank of America and other institutions work to find off the evolving challenges.

About the Author

Most Popular Articles

Housing market flashing recession signal

The housing market is signaling there will be an economic recession by the 2020 election, according to Benn Steil, director of international economics at the Council on Foreign Relations.

Oct 11, 2019 By

Latest Articles

MBA: U.S. refinance activity triples on low rates

Last week, the 30-year fixed-rate mortgage fell, spurring another uptick in refinance demand, resulting in mortgage applications rising by 0.5%, according to the Mortgage Bankers Association. The organization indicates that on an unadjusted basis, the index crawled forward 1% for the week ending on October 11, 2019. Despite this increase, Joel Kan, MBA’s vice president of economic and industry forecasting, said the ongoing interest rate volatility is impacting a borrowers’ ability to lock in the lowest rate possible.

Oct 16, 2019 By