BofA Discloses Three Mortgage Lawsuit Accords in Third Quarter
Bank of America Corp., the second- largest U.S. bank, settled three cases where mortgage bond investors accused the lender of misrepresenting the quality of loans within the securities.
The firm settled suits with Dexia SA, Sealink Funding Ltd. and Bayerische Landesbank, Germany’s second-biggest state-owned lender, on Sept. 27, Charlotte, North Carolina-based Bank of America said today in a regulatory filing. The firm didn’t disclose the amounts it paid.
Chief Executive Officer Brian T. Moynihan, 53, has spent more than $40 billion to clean up defective mortgages and improper foreclosures. The third-quarter settlements mean a suit from insurer American International Group Inc. (AIG) is one of the firm’s remaining major disputes over mortgage securities.
“We’ve been chipping away at this, we settled a group of them this quarter,” Moynihan told employees in an Oct. 17 town hall meeting. “You should expect that if people are reasonable, over a period of time,” more accords will be reached.
The lender also said it could have as much as $2.8 billion in legal costs as of Sept. 30 beyond what it has already set aside. That’s a decline from the $4.1 billion estimated three months earlier because of a settlement of a class-action suit tied to the 2009 takeover of Merrill Lynch & Co., said Jerry Dubrowski, a Bank of America spokesman.
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