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.
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