Bank of America is on the brink of potentially loosing $60 billion over lawsuits relating to deteriorating mortgage-backed securities, including 530 mortgage trusts sold by Countrywide, including to report released Friday.
The Motley Fool reports that the Bank of America $60 million case involves a settlement struck in 2011 between the bank and 22 investors. These investors include big names such as BlackRock, PIMCO, and Metlife.
Mark Palmer of BITG research told the Motley Fool that around 56 percent of the "Countrywide MBSes MBIA insured had issues so odious that a lender would be too embarrassed not to repurchase them." If the percentage was applied to the $108 billion, it would come out to around $60.5 billion, he estimated.
According to the report, investors have lost an estimated $108 billion. Some of the investors are alleging that Bank of America did them wrong.
They say the bank "put its own interests before theirs -- for example, by modifying mortgages contained within the MBSes, then neglecting to buy them back from the investors, as the plaintiffs allege was the agreement between the parties," according to the report.
The report comes on the heels of Federal Housing Finance Agency (FHFA) withdrawing its conditional objection to the bank's $8.5 billion settlement, reported Fox News.
The court that ordered the withdrawal said the agency did not give a reason for the decision.
A new hearing is slated for May 30 in New York on whether the $8.5 billion settlement should be approved.
