BOA legal bills could exceed reserves by $5bn

by Ryan Smith02 May 2014
As it weathers lawsuit after lawsuit over shoddy mortgages, Bank of America’s legal bills could exceed its reserves by as much as $5 billion.

The bank gave the estimate in a quarterly filing with regulators, according to a Bloomberg report. That’s down considerably from the $6.1 billion estimate the bank gave in December. However, the lender also recently reported a first-quarter loss after adding $2.4 billion to its legal reserves, Bloomberg reported.

Bank of America has been plagued by litigation over its sale of faulty home loans – especially those sold by its Countrywide unit. Last month, the bank agreed to pony up $9.33 billion to the Federal Housing Finance Agency to settle various claims over the sale of mortgage-backed securities.

Federal prosecutors are still seeking more than $13 billion from the bank to resolve other mortgage-bond claims, Bloomberg reported.
 
 

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