FDIC Objection Throws A Wrench Into Bank Of America's $8.5 Billion Settlement Bank of America needs more than a $5 billion vote of confidence from Warren Buffett to get back on track. It needs to remove uncertainty over the cost of its mortgage related lawsuits but it looks like the Federal Deposit Insurance Corporation will stand in the way of that. The FDIC filed an objection with the State Supreme Court of New York over Bank of Americaâs proposed $8.5 billion settlement with mortgage bond holders throwing a wrench in the bankâs efforts to put its mortgage problems behind it. In its filing, which was first reported by Bloomberg, the FDIC says it is the receiver of numerous banks and owner of many certificates issed by many of the trusts that would be covered by the proposed settlement. âThe reason for the FDICâs objection is that it does not have enough informatino to evalute the settlement,â the agency said in its filing. At stake is a record $8.5 billion proposed settlement between BofA and 22 investors including PIMCO, the Federal Reserve Bank of New York and BlackRock. 5 images Gallery: ETFs Overweight BAC Video: Bank of America, Financials Get Buffett Boost Last year the private investors argued that BofAâs Countrywide unit made billions at their expense by continuing to service bad loans while running up servicing fees. In October the group sent BofA a letter demanding that it repurchase the soured mortgage securities. At first, BofA rebuffed the claims calling them âutterly baselessâ saying the problems stemmed from the economic downturn rather than any underlying problem with how the mortgages were sold to investors. But in June the Bank announced it would settle the claims. âThis is another important step we are taking in the interest of our shareholders to minimize the impact of future economic uncertainty and put legacy issues behind us,â Bank of America Chief Executive Officer Brian Moynihan said at the time. âWe will continue to act aggressively, and in the best interest of our shareholders, to clean up the mortgage issues largely stemming from our purchase of Countrywide.â The settlement hit some roadblocks as several parties in the case have opposed the terms saying they donât have enough information to evaluate whether or not the settlement is reasonable. New York Attorney General Eric Schneiderman is attempting to block the settlement as well. Earlier this month he urged a state judge to reject the proposed calling it unfair and that Bank of New York Mellon, the trustee representing the investors, committed fraud for failing to ensure that the mortgage securities were created in accordance with state law and for failing to act in the investorsâ best interest. News about the FDICâs objection hit after the markets closed.BofA shares led market gains today closing up over 8% to $8.39. Bank of America has been slammed with a plethora of bad news in recent weeks as questions about its capital position swirl. Then last week billionaire investor Buffett injected $5 billion into the bank which helped restore a bit of confidence in the nationâs largest bank. The bank also announced the sale of about half its stake in China Construction Bank. The sale will bring in $8.3 billion in cash and an after-tax gain of $3.3 billion, Bank of America said.
Pimco, lol These guys claim to be the smartest bond traders in the world and when they lose they do the old 'sue and pray' US trick
Great gift the markets gave all you expert traders, even you day traders. Shorting into the close, the last 15 minuets had great shorting opportunities to hold into friday. The play is into friday. Numbers are going to more than disappoint and the Credit market is not only drying up but it is signaling a double dip Depression. Of course the Stock Market thinks other wise. Play for the week, Shorting in to the close of the last 15 minuets to get some good prints. Holding into Thursday numbers, if the market rallies more into weds....building on to those short positions. If the market sells off hard before Thursday or before, take profits and get flat. If we chop into thursday's session hold fast...do not add or sell until the move into thursday's trading and fridays trading day. If numbers surprise to the upside, .01% chance....then take your lost, but It's the best Risk Reward play of the week.
OK now after the BIG 2 day rally this is looking like a relief rally. Set-up for the flush. But it looks like it still has some short legs up to suck in more money before the flush. ???? The previous short squeez in June or was that July was a wicked upside move. Now we do those in 2 days.......
OMG you're an embarrassment to Canada. Couldn't you just pretend you are from some Texas town, hoping to finish your high school degree at some point in the future, but in the meantime you are a frontrunner to lead the Republican party ?
Unfortunately, I have to agree. There just isn't a good place for people to invest right now, so things nervously run a little up and a little down, but eventually, there has to be more bearishness. There is virtually no way to avoid it. Hide yo' kids. Hide yo' wives. Hide yo' husbands, cuz they rapin' errbody out here.