BofA Mortgage Investors Extend Discussions on Putback Demands

The investor group including Pacific Investment Management Co. that is weighing whether to sue Bank of America Corp. over about $47 billion in mortgage bonds agreed to extend talks with the lender for the second time.

The bond owners agreed to renew “their extension of any time periods” laid out in an Oct. 18 letter, said Kathy Patrick, a lawyer for the investors, in a statement e-mailed late yesterday. The original extension was set to expire at the end of January, Bank of America Chief Financial Officer Charles Noski told analysts last month in a conference call.

Pimco, which runs the world’s biggest bond fund, BlackRock Inc. and the Federal Reserve Bank of New York are among investors demanding that the biggest U.S. bank by assets repurchase loans packaged into bonds, people familiar with the dispute said in October. Chief Executive Officer Brian T. Moynihan has said the bank would engage in “hand-to-hand combat” to reject unwarranted buyback demands.

“We’re not doing anything that’s not going to be in our shareholders’ best interests, but we always want to talk to everybody in the world to make sure we understand where they stand,” Noski said in the Jan. 21 call.

Robert Stickler, a spokesman for the Charlotte, North Carolina-based bank, confirmed that discussions were continuing and declined to say if there was another deadline. The mortgages in the dispute were created by Countrywide Financial Corp., acquired by Bank of America in 2008.

There were 17 financial firms in the bond investor group, Patrick said in December, when the first extension was announced. Investment managers, pension funds and insurers are among the group, said Patrick, of Gibbs & Bruns LLP, who declined to name the firms.


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