Wednesday, September 15, 2010

BofA May Owe $20 Billion in Mortgage Buybacks, Insurers Say - Bloomberg

BofA May Owe $20 Billion in Mortgage Buybacks, Insurers Say - Bloomberg:
"Moynihan told an investor conference in San Francisco yesterday that buyback demands are manageable, and that his goal is to resolve legal issues as quickly as possible.

Bank of America acquired Countrywide Financial Corp., once the biggest U.S. mortgage lender, in July 2008 after the target faced bankruptcy amid payment defaults and foreclosures. Insurers have also requested files on about $9.8 billion of loans that hadn’t triggered buyback claims as of June 30, according to Bank of America’s quarterly report.

The New York Insurance Department was aware of the AFGI letter and is reviewing the issue because buybacks “will materially impact the financial condition of the insurers we regulate,” Michael Moriarty, New York Insurance Department deputy superintendent, said in an e-mail.

Insurers are negotiating repurchases and suing firms including Bank of America as they seek to recover from losses on mortgage-security guarantees. Bank of America has described the disputes over mortgage repurchases as a battle, while Dominic Frederico, CEO of Assured Guaranty, said last month that settlement talks with BofA were “like Chinese water torture.”"

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