BofA Reportedly Discussing Settlement with Big Mortgage Investors


Bank of America (NYSE:BAC) is reportedly in talks to settle various disputes with some of its largest mortgage investors, a move that would mark a shift from its earlier one-at-a-time combat stance against requests to repurchase certain mortgage loans made before the housing market collapsed.

Those currently in settlement discussions with the nation’s largest bank by assets include the Federal Reserve Bank of New York, FreddieMac, Blackrock (NYSE:BLK) and Allianz SE’s Pacific Investment Management Co., better known as Pimco, according to the Wall Street Journal, which cites people close to the matter.

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Investors had sent a letter to the bank in October alleging that it did not properly service 115 bond deals comprised of residential mortgages, giving the company 60 days to respond.

That expiration is slated for tomorrow, and the bank seems to be shifting from its view in October and November, when CEO Brian Moynihan said he was uninterested in lump sum payments, and would instead engage in "day-to-day, hand-to-hand combat" on investor requests to repurchase faulty mortgage loans made before the US housing collapse, according to the Journal.

Of course, at this time, the talks could still fall apart, however the sources said the effort is an attempt by the bank to solve the matter, and the parties have agreed to begin “constructive dialogue,” where wants and concerns will be discussed, according to the report.

It is unknown at this time what the possible settlement terms could be, however BofA has more repurchase requests than any of its rivals and services a larger portion of the nation’s mortgages, mostly through mortgage lending giant Countrywide.

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