Mortgage buybacks may cost banks $106 billion, FBR’s Miller says
JPMorgan Chase & Co. and Bank of America Corp. are among U.S. banks that may face $54 billion to $106 billion in costs as more investors demand that issuers of mortgage-backed securities repurchase faulty loans, according to Paul Miller of FBR Capital Markets. Miller estimated in September that underwriters of mortgage-backed securities may face losses of $44 billion to $91 billion. The increase reflects that liabilities will rest with issuers of the securities, the analyst wrote today in a note to investors. Miller also said his new estimate reflected banks disclosing more about possible losses.