Bank of America Corp., the biggest U.S. bank by assets, still faces costs to settle disputes with mortgage firms Fannie Mae and Freddie Mac.
“We still have work to do on future claims, Fannie Mae especially,” Bank of America Chief Executive Officer Brian T. Moynihan said today at a conference in London. “We continue to make adjustments, which in the scheme of the overall cost are relatively minor.”
Bank of America announced $3 billion in settlements with the so-called government-sponsored entities in January, prompting Moynihan to tell investors that he was “pleased to put the GSEs behind us.” Unresolved demands for loan refunds surged $2.9 billion to a record $13.6 billion the quarter after the deals, fueled mostly by claims from Fannie Mae and Freddie Mac.
The bank resolved a “major portion” of its liabilities with the deals, Moynihan, 51, said today. The company’s 2008 takeover of Countrywide Financial Corp. saddled the Charlotte, North Carolina-based bank with demands that it repurchase loans marred by false or missing data about borrowers and properties.
“It will continue to be in front of us as we work for the next couple of years to get the rest of the GSE work behind us,” Moynihan said. “We continue to fight through these issues.”
Bank of America declined 29 percent in New York Stock Exchange composite trading for the year ended yesterday, making it the worst performer in the 24-company KBW Bank Index. The lender was left behind as competitors including JPMorgan Chase & Co. and Wells Fargo & Co. won Federal Reserve approval to increase dividends following a review of their financial health.
Moynihan told investors in January and March that the bank could raise its dividend this year, then said in April that the firm has “work to do” and an increase may not happen until next year.