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BofA's $8.5B mortgage settlement approved

  • Judge Barbara Kapnick has approved Bank of America's (BAC -0.6%) hotly contested $8.5 MBS settlement with private investors, saying the trustee acted in good faith when negotiating the deal.
  • Still lower on the session, BofA has narrowed its losses by about 1%.
Comments (25)
  • burger guy
    , contributor
    Comments (215) | Send Message
     
    Excellent
    31 Jan 2014, 12:24 PM Reply Like
  • rijensen
    , contributor
    Comments (868) | Send Message
     
    Hot damn... hopefully last big one
    31 Jan 2014, 12:26 PM Reply Like
  • billmichael
    , contributor
    Comments (122) | Send Message
     
    I was gonna say that...!!!
    31 Jan 2014, 03:41 PM Reply Like
  • Michael Slattery
    , contributor
    Comments (226) | Send Message
     
    My understanding is this is not the end of the settlements with institutions. Several others still in the wings including AIG.

     

    When will those be behind BAC, then it's an investment. To many unknowns at this point in time.
    31 Jan 2014, 12:27 PM Reply Like
  • beeber
    , contributor
    Comments (55) | Send Message
     
    Need more commentary like this to keep wall of worry in place.

     

    The opportunity cost lost by investors on this heavily discounted stock is amazing.
    If you continue to wait until the coast is completely clear you will be paying more than one times book and much of the opportunity will be lost.

     

    The stock is not going to wait while you wait until you feel it is risk free.
    Stock market doesn't work that way.

     

    Good luck to you.
    31 Jan 2014, 12:41 PM Reply Like
  • beeber
    , contributor
    Comments (55) | Send Message
     
    This was the AIG case.
    31 Jan 2014, 12:42 PM Reply Like
  • billmichael
    , contributor
    Comments (122) | Send Message
     
    Reminds me of an old saying by the Chinese that goes,
    "Man will sit with mouth wide open for very long time before roast duck come flying in."
    Here's another one,
    "The best fruit goes to those willing to reach the furthest."
    31 Jan 2014, 03:44 PM Reply Like
  • fromgorby
    , contributor
    Comments (7) | Send Message
     
    By then the money will have been made.
    31 Jan 2014, 05:03 PM Reply Like
  • TBV
    , contributor
    Comments (142) | Send Message
     
    Beeber ..great point
    31 Jan 2014, 07:35 PM Reply Like
  • DoowopDave
    , contributor
    Comments (252) | Send Message
     
    There are several suits outstanding and more to come, but this was the 800# gorilla. Now the Fed can allow a dividend.
    31 Jan 2014, 12:36 PM Reply Like
  • Reim
    , contributor
    Comments (192) | Send Message
     
    Sit on the side lines and die. This clears BAC to make a rapid rise to 20.00 or more.
    31 Jan 2014, 12:37 PM Reply Like
  • Caludio
    , contributor
    Comments (267) | Send Message
     
    There we go! $20 is just around the corner. However I expect this number to grow up to $35 by the end of the year. This is because mutual funds are going to be cleared to buy soon
    31 Jan 2014, 12:50 PM Reply Like
  • RALPHSCHAUSS
    , contributor
    Comments (63) | Send Message
     
    Great stuff !
    BofA really deserves it and its shareholders of . After all, the bank and its shareholders of Dec 1997 paid billions for losses , litigation, compensation etc for the disastrous acquisition of Countrywide and ML.The share price fell more than 95 %. For sure, it saved billions also for the US Treasury and ultimately the US taxpayer. Both companies would have landed straight in bankruptcy after Lehmann went belly up in September of 2008. Though Mario Cuomo nor Erik Schneidermann never ever said thanks to Ken Lewis for his truly horrible mistakes in buying these two outfits. ML ist better but should have gone for zero Dollars over the counter on the Tuesday after Lehmann went bust. But Ken was too starry eyed.
    Frankfurt, Germany
    31 Jan 2014, 01:03 PM Reply Like
  • Wow72
    , contributor
    Comments (575) | Send Message
     
    One thing that drives me crazy is the idea somehow countrywide was a bad Idea. It was 800 billion in mortgages for 4 billion dollars. They aren't even over 50 billion in legal fees, not sure servicing costs? lets say 50 billion? 60% plus of the loans were considered good. Now amortize 60% of 800 billion and deduct the expenses? Call me simple Id say its a good deal. Id love to hear what other people think?
    31 Jan 2014, 01:52 PM Reply Like
  • RALPHSCHAUSS
    , contributor
    Comments (63) | Send Message
     
    This must really hurt Mike Mayo at CLSA who hates BAC.
    31 Jan 2014, 01:11 PM Reply Like
  • Wow72
    , contributor
    Comments (575) | Send Message
     
    OMG Finally!!! A Judge with common sense!
    31 Jan 2014, 01:26 PM Reply Like
  • amn440
    , contributor
    Comments (16) | Send Message
     
    The rest of the potential litigation could cost the Bank, in the billions- $2-$10, conservatively! well within the reserves they took and relatively immaterial to a bank of its size. The discount to Book Value for potential litigation from the crash, will now start to erode elevating the stock price, once this correction is over. Let's remember these size organizations ALWAYS have a few billion dollars of liability from litigation in the best of times.
    31 Jan 2014, 01:48 PM Reply Like
  • mphill47
    , contributor
    Comments (573) | Send Message
     
    This is HUGE news for all of us that are long BAC. Probably the one suite that could have thrown a monkey wrench into investing in BAC for the next year or so.
    31 Jan 2014, 02:01 PM Reply Like
  • jeff lauder
    , contributor
    Comments (174) | Send Message
     
    I've been long the stock for 2 years and loaded up on the Mar 16 Callsfrom .55 -1.10 This thing acted GREAT today! Long and strong!
    31 Jan 2014, 03:05 PM Reply Like
  • Free Markets Rule
    , contributor
    Comments (139) | Send Message
     
    this must be driving Don Dion crazy. :)
    31 Jan 2014, 03:09 PM Reply Like
  • TBV
    , contributor
    Comments (142) | Send Message
     
    So many don't understand what does this case mean to most of US banks. Not only this is a great news for $BAC but also for the whole industry.
    31 Jan 2014, 07:39 PM Reply Like
  • wally R
    , contributor
    Comments (3) | Send Message
     
    I don't know if wow 72's numbers are correct but I have been long this stock for years. A couple of questions though. Why has no one,Angelo, gone to jail and where was the government going to get any money if Bac did not make this deal. Let's ask Geitner.
    1 Feb 2014, 12:59 PM Reply Like
  • Wow72
    , contributor
    Comments (575) | Send Message
     
    Its been a while and I whipped those numbers off the top of my head, I'm pretty sure I'm close but its still a very rough estimate. Servicing costs I just threw a number at. Let me know if anyone has anything to add or correct, I believe at the time the assumption was everyone thought most of Countrywide mortgages were worthless and the default rate was much higher, thus the 4 billion dollar price tag and with a 40% default rate im sure they had cash flow issues. It wasn't till later they learned 60% of the loans were good, and I forget where I got that info from, its been since 2012 since I knew that. Id love for someone to verify. There was still tons of value for someone who could manage the loans.

     

    If Countrywide was a bad deal do you think bankers would have held on this long, with this much bad publicity, the only reason these guys would stick it out is it was worth it!

     

    The short answer to why no one has gone to jail, The US GOVERNMENT caused the 2008 crisis, and they are having a hard time proving otherwise.
    1 Feb 2014, 04:05 PM Reply Like
  • Wow72
    , contributor
    Comments (575) | Send Message
     
    Without spending too much time, Im starting to think the 60% is conservative, Hustle loans themselves were between 43% and 57% default rate and they were a smaller percentage of the total. Countrywide provided mortgage servicing for nine million mortgages valued at $1.4 trillion as of December 31, 2007. This gives BofA 20-25% of the total home mortage market. as per wiki, they are huge numbers.
    1 Feb 2014, 05:40 PM Reply Like
  • jyabc888
    , contributor
    Comments (94) | Send Message
     
    added more BAC at $16.75/Share last Friday... Looks good now and for the next 2-5 years.. :-)
    2 Feb 2014, 02:49 PM Reply Like
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