BofA points to potential impairments to home loans division
[Update 1: clarifies that the reference to the goodwill impairment charge Bank of America announced today is not related to the GSE settlement but rather the increased costs associated with actions taken as referenced in the 8K filing.] In a Securities and Exchange Commission filing Monday, Bank of America (BAC) will reduce the value of its Home Loans & Insurance business segment. Bank of America also announced today its plans to record a fourth-quarter charge of $3 billion after settling repurchase claims brought by the government sponsored entities on home loans sold to the GSEs by Countrywide Financial Corp. through 2008. BofA expects to record a non-cash, non-tax deductible goodwill impairment charge of about $2 billion in the fourth quarter in its Home Loans & Insurance unit, according to the SEC filing. "The estimated fair value of the business segment has declined as a result of increased uncertainties, including existing and potential litigation exposure and other related risks, higher servicing costs including loss mitigation efforts, foreclosure-related issues and the redeployment of centralized sales resources to address servicing needs," the filing states. The settlement will not impact the Tier 1 and tangible equity capital ratios at the bank, the filing adds. Write to Jacob Gaffney.