It's hard to shake the financial crisis.
Bank of America, like other banks, is facing anger from some investors who bought its mortgages in the run-up to the financial crisis. For a couple of years, the investors have been demanding that the banks buy back mortgages that have gone sour.
The banks have been working through the so-called repurchase demands and deciding which ones they're willing to pay. Wednesday, Bank of America reported that outstanding repurchase claims from investors jumped to more than $25 billion from $10 billion a year ago.
One of the investors is Fannie Mae, the government-sponsored mortgage giant, and Bank of America and Fannie have been arguing over which loans qualify for repurchase. Wednesday, the bank raised its prediction for the possible losses it could suffer from repurchases.
In a conference call, ISI analyst Ed Najarian asked about the dispute with Fannie. "Any sense of when that overhang might get sort of put into the rearview mirror," he asked, "or how?"
BANK OF AMERICA CHIEF FINANCIAL OFFICER BRUCE THOMPSON: "I think the most likely outcomes are either that there is a settlement ... or there is some other way that we would look to resolve that. And that core disagreement remains, and as we've said ... there are ongoing discussions, but there is obviously nothing done. ... We obviously feel pretty strongly about what our position is here. At the same time, getting these legacy issues ... behind us is a good thing and eliminates an element of uncertainty in our mind. And the last thing I just said, it has got to be the right decision for the shareholders, and that is what we do day in, day out as we try to put these different issues behind us."
- Investment & Company Information
- Bank of America
- Fannie Mae