Genworth Says BofA Clash to Cost Less Than $834 MillionMarci Jacobs
Genworth Financial Inc., the guarantor of home loans in the U.S. and Canada, predicted a dispute about mortgages will cost the insurer “significantly less” than the $834 million sought by Bank of America Corp.
The case focuses on loans backed by Genworth, the insurer said in a filing today. The company said last year that Bank of America was seeking “in excess of $834 million” plus punitive damage tied to denied claims. Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup lenders’ costs. Guarantors like Genworth can reject claims when they believe policies were sold based on false information.
Bank of America Chief Executive Officer Brian T. Moynihan is working to resolve legal disputes after spending more than $45 billion on litigation, settlements and refunds for investors to compensate for shoddy mortgage practices, including those at Countrywide Financial Corp. Richmond, Virginia-based Genworth is in talks with Bank of America to resolve the clash, the insurer has said.
The discussions involve “a potential resolution of certain, and potentially all, aspects of the disputes,” Genworth said today in a regulatory filing. “We currently believe we may be able to resolve this matter for significantly less than $834 million, the previously-disclosed amount of claimed damages.”
Al Orendorff, a spokesman for Genworth, declined to comment, as did Charlotte, North Carolina-based Bank of America’s Dan Frahm.