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This just in: The lawsuits against Bank of America (BAC -5.1%) are never going to stop....
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Wednesday, January 9, 3:43 PM ETThis just in: The lawsuits against Bank of America (BAC -5.1%) are never going to stop. Despite the $10B+ settlement with Fannie Mae, U.S. Attorney Preet Bharara makes clear he will continue to aggressively go after BofA for selling fraudulent loans to the GSEs. Maybe this, not the downgrade, is what has the shares in a funk today.
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Respectfully, no. BofA dated and married CW, warts and all, on BofA's own dime. Merrill-Lynch, however, was a "shotgun wedding" with Treasury holding the double-barrel to Ken Lewis' head.
It has been pretty well determined here that B of A's book value is between $13 - $15.00. I have noticed that their balance sheet is something like $2trillion in assets and about $1.85T in liabilites. You expect a 400% growth in a company with such a tight balance sheet? By your logic then I should choose one of the many companies with much better balance sheets and expect 1000% increase?
Chad in CO
Wbat is the book value of B of A? Show me the numbers. What I see is about net assets of $150BB. And shares outstanding?
Chad in CO
Now another question. How are all of B of A's under water mortgages calculated in their overall assets? Are they at all? And just exactly what is the figure of non-performing mortgages? Does anyone actually know?
Chad in CO
Chad
Most of these lawsuits are rounding errors on the 2T dollar balance sheet. Because they do affect earnings I believe the company is worth between $13-$14 dollars/share.
By far the biggest risk which I don't know how to quantify are the derivitives. I don't think they are in as deep as some of the other banks but they still present a risk. They also have a fairly large interest rate risk on the securities they hold.
Keep 'em coming!!
you get sued ten iems by ten different agencies of the Govmt, state, federal or local. Has anyone ever measured the colossal waste which is being heaped on the private economy by the STATE , in the largest sense ??? The bureaucrats are just there to enhance their reelection potential with no regard at all for the the wasteful damage they are causing. It is quite obvious as they are never held accountable for being wasteful. Just look at the JPM " Londn whale situation" where the bank is being sued by 12 different US "state" agencies, committees of the Sewnate , the House etc. I would have thought ONE Regulator would be enough and adequate for dealing with this.
Frankfurt Germany ( here we have just one Regulator= BAFFIN doing the lawsuits for infractions)
The reason the board moved towards Brian was because it knew litigation would be ongoing for many years. I was there when they were completing the due diligence at the time of the purchase in 2008. when you have a trillion dollars worth of inventory now worth about about 400 million a lot of the properties in California, Nevada and Michigan Arizona and Ohio now very depressed real estate markets some of the biggest not to mention Florida and Texas has created the potential for a tremendous amount of litigation Florida and California, Ohio and the practices were unspeakable and before B of A could figure it all out they what countrywide had done with its underwriting practices the storm was already upon them worse than any hurricane. I still have reports and loan numbers of 10's of thousands of loan perhaps 100s of thousands of loans where fee's and surcharges that were meant to create profit margins are now the basis of what predatory lending practices of CHL are now or have been called into question. When I left as part of the lay offs in 2011 and went to work the next month of Chase my experience with CHL was what Chase has been and continues to try to avoid through a rigorous auditing process. No such process was in place at BAC Home loans until just before I left in 2011. They were trying it was just that countrywide the Home Loan division resisted the changes to maintain sales quotes and bonuses hence while she was trying to turn the organization around the resistance Barbara Doeser experience would eventually lead to her leaving the Bank. She tried to stop the bleeding it was just coming from too many places.
BAC will eventual sell off enough of its assets to the point where a take over by one of the other larger Banks will be able to 5-10 % of the stock some where right around 10-11 per share or a 4 for 1 or 3 for 1 stock swap would be my guess. Before that happens the stock will see lows of $6 or $7 depending on the amount of litigation etc. Have a great day of trading tomorrow. I left in 2011 with the stock I was laid off in march and my stock was liquidated in April at about 13.25 per share which I had acquired in in January 2009 at about 7.20 per share since I sold my stock in 2011 it has never seen $13 dollars again. when I came to JPM July I took all that money and moved it into JPM at about 30.00 per in September I also put part of my BAC Severance package into JPM at the time. I believe in financials just not this financial.
It seems there is no principle just the interest because the loans have to be paid back to whoever gave the money to CW in the first place. So when BAC sells the MSR;s for a few millions of $ that's all they get? It doesn't add up.