Bank of America Corp executives said on Wednesday they expect higher mortgage repurchase claims in coming quarters, but lower mortgage servicing costs.
For the third quarter, the bank reported a 12 percent increase in so-called "rep and warrant" claims from investors who bought mortgage securities from the bank years ago. The investors want the bank to buy the securities back because of what they say are errors in documentation and other problems.
Chief Financial Officer Bruce Thompson said on a conference call with analysts that the bank has "ongoing disagreements" with Fannie Mae over what constitutes a valid repurchase request. He also said he expects claims from private investors to grow.
However, Chief Executive Brian Moynihan said that "given everything we know, we would expect (legacy mortgage costs) to come down next quarter and beyond," as the bank continues to work through bad mortgage loans that were originated several years ago. (Reporting By Lauren Tara LaCapra in New York and Rick Rothacker in Charlotte, N.C.; editing by John Wallace)