- "Mortgage-related litigation has recently gotten a second wind and has expanded beyond investor claims,” says S&P, now estimating legal tab for U.S. banks could be another $56.5B-$104B. The good news is banks have gotten ahead of even these crazy numbers by boosting litigation reserves to nearly $155B.
- The bad news would be if Bank of America's (BAC) $8.5B mortgage settlement with private parties gets tossed out by a federal judge (see Article 77 hearing coverage), the litigation losses could "escalate significantly ... the ability of US banks with the largest exposures to withstand additional expenses is not unlimited.”
- C, WFC, MS, JPM, and GS declined to comment for the story.
- From the Department of Legal Issues Are Going Nowhere: The Federal Home Loan Bank of Pittsburgh - claiming its losses of more than $1B are not covered by the JPMorgan global settlement - asks a judge to force JPM to turn over the draft complain from the DOJ which includes the name of a bank employee described as a cooperating witness for the government.
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Additional legal tab for banks could exceed $100B
Nov 27 2013, 09:22 ET