So BOA leaves homeowners high and dry as they decline mortgage refinancing deals and robosign foreclosures but they agree to pay PIMCO, Blackrock, and the Fed, and the stock price increases.
The HAMP program and the Obama administration's efforts to save foreclosures and distressed homeowners has been a complete flop and NOTHING gets done. People just lost their homes, all their equity or previous investment.
Meanwhile the mega wealthy hedge fund managers get paid back.
There should be RIOTS in the streets. People who have lost their home to BOA should be F*CKING OUTRAGED!
Bank of America Near $8.5 Billion Deal on Mortgage Securities
Bank of America is near to a deal to pay $8.5 billion to settle a suit by investors who purchased mortgage securities that soured, handing a victory to a group of money managers including Pimco and BlackRock as well as the Federal Reserve Bank of New York.
The company’s board has yet to approve the settlement, but both sides are aiming to get it done by Thursday, according to an individual close to the negotiations. The timing is intended to take place before the second quarter ends.
Bank of America stock jumped 38 cents in after-hours trading to $11.19 a share after news reports of the deal.
“I think this is huge,” said Mike Mayo, a bank analyst with Credit Agricole in New York. “It’s about time the industry resolves issues from the financial crisis and focuses more on righting their companies and improving the economy. This is the most significant step since the financial crisis that helps do that."
Last fall, analysts warned that the toll from suits by these investors and other private holders could total tens of billions of dollars, but the proposed deal would lift some of that uncertainty. The securities affected by the deal come almost entirely from Countrywide, the subprime mortgage lender whose excesses have come to symbolize the excesses of the housing boom. Bank of America bought Countrywide in 2008.
The $8.5 billion settlement represents just a portion of the bank’s total exposure to faulty mortgage bonds. Analysts say it appears to cover about $56 billion of the roughly $222 billion of troubled loans that were bundled into securities, largely by the Countrywide Financial business in acquired in early 2008.
Other huge risks from the fallout of the subprime mortgage crisis still loom — both for Bank of America and its giant peers. All 50 state attorneys general are in the final stages of settling an investigation into abuses by the biggest mortgage servicers, and are pressing the banks to pay up to $30 billion in fines and penalties.
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