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This just in: The lawsuits against Bank of America (BAC -5.1%) are never going to stop....

This 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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Comments (30)
  • jackooo
    , contributor
    Comments (1525) | Send Message
     
    Just trying to make a name for himself!!!!
    9 Jan 2013, 03:52 PM Reply Like
  • Colin Doyle
    , contributor
    Comments (725) | Send Message
     
    Preet Bharara, the righteous. The Bharara family had no problem taking over half a billion dollars from Amazon for a website that sells diapers. Hmm.
    10 Jan 2013, 02:15 AM Reply Like
  • 7Robert7
    , contributor
    Comment (1) | Send Message
     
    Yup!
    10 Jan 2013, 09:25 AM Reply Like
  • krk
    , contributor
    Comments (826) | Send Message
     
    Keep your friends close, but your enemies closer.
    http://bit.ly/VyfB5J
    11 Jan 2013, 05:28 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2610) | Send Message
     
    The $1 billion he talks about is not a large amount of money relative to the size of the bank.
    9 Jan 2013, 03:53 PM Reply Like
  • jl67
    , contributor
    Comments (2) | Send Message
     
    I half believe that BofA was forced to take on CountryWide...why are they (BofA) being ask to pay again and again..?
    9 Jan 2013, 03:56 PM Reply Like
  • Noquiche
    , contributor
    Comments (222) | Send Message
     
    Because they have more money then the government. Wonder when Apple and Google will be sued for something.
    9 Jan 2013, 04:36 PM Reply Like
  • Buckoux
    , contributor
    Comments (6334) | Send Message
     
    "I half believe that BofA was forced to take on CountryWide."

     

    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.
    9 Jan 2013, 05:31 PM Reply Like
  • Noquiche
    , contributor
    Comments (222) | Send Message
     
    Regardless they shouldn't be tried for the same "crime" more than once.
    9 Jan 2013, 05:36 PM Reply Like
  • LukkiC
    , contributor
    Comments (55) | Send Message
     
    BOA has damn good lawyers !! Most of the lawsuits will go NOWHERE !! BAC will be $ 50+ in 2015........
    9 Jan 2013, 04:00 PM Reply Like
  • chad2
    , contributor
    Comments (232) | Send Message
     
    Mr. Lukk,
    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
    9 Jan 2013, 07:18 PM Reply Like
  • chad2
    , contributor
    Comments (232) | Send Message
     
    Mr. Lukk,
    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
    9 Jan 2013, 04:33 PM Reply Like
  • Noquiche
    , contributor
    Comments (222) | Send Message
     
    correct.. the value is closer to $15.00. Tangible book is $13.00+ BV is about $20.00
    9 Jan 2013, 04:39 PM Reply Like
  • Henry Tan
    , contributor
    Comments (61) | Send Message
     
    He's trying to be sarcastic
    9 Jan 2013, 04:42 PM Reply Like
  • chad2
    , contributor
    Comments (232) | Send Message
     
    Thank You Quiche;
    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
    9 Jan 2013, 05:38 PM Reply Like
  • chad2
    , contributor
    Comments (232) | Send Message
     
    If you're referring to me, you're off base. I'm entirely serious. You see, I find it near impossible to actually get hold of what B of A's balance sheet really is. And of course, it's even more difficult because they're in court all the time, and seem to be losing all the time.
    Chad
    9 Jan 2013, 05:41 PM Reply Like
  • Henry Tan
    , contributor
    Comments (61) | Send Message
     
    I am not referring you...
    9 Jan 2013, 06:00 PM Reply Like
  • Noquiche
    , contributor
    Comments (222) | Send Message
     
    They actually lay out the mortgage risk pretty well in their quarterly presentations. There was a question when it came to Fannie which has been resolved and their numbers may be a little bit off on the mono-lines but not significantly. They have reserves for most of these which I assume is held in treasury bonds or cash.

     

    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.
    9 Jan 2013, 06:01 PM Reply Like
  • puertoescondidan
    , contributor
    Comments (54) | Send Message
     
    You're correct about the lawsuits being "rounding errors" relative to assets; problem is, BAC's equity is also a rounding error relative to assets, so a major suit can have a dramatic impact on equity.
    10 Jan 2013, 12:09 PM Reply Like
  • Noquiche
    , contributor
    Comments (222) | Send Message
     
    As long as debt runoff keeps pace with the loss of asset value then equity should not be affected. If not then I agree with you.
    11 Jan 2013, 06:37 AM Reply Like
  • The_Hammer
    , contributor
    Comments (4057) | Send Message
     
    The tan man walked away free and clear along with his mtg broker stooges.
    9 Jan 2013, 04:53 PM Reply Like
  • drogersw6509
    , contributor
    Comments (7) | Send Message
     
    All the banks had a nice run last year. BAC in particular, now it’s time for the big boys to trash the banking sector. They are short and want to make big money. Expect to see many negative stories about BAC and other banks. Just ride it out keep your stock. Look for oil to move up next.
    9 Jan 2013, 05:43 PM Reply Like
  • Nate Sterling
    , contributor
    Comments (506) | Send Message
     
    Yeah, seems like the lawsuits keep coming against BAC, but fairly soon they will mostly be resolved and then BAC will be on a steady climb to $15+.
    9 Jan 2013, 06:20 PM Reply Like
  • masonkelsey
    , contributor
    Comments (17) | Send Message
     
    Shouldn't effect the stock. Some people think the stock is overbought. I don't. Will be buying more as 2013 will be a good year for Bank of America.
    10 Jan 2013, 02:25 AM Reply Like
  • drogersw6509
    , contributor
    Comments (7) | Send Message
     
    All the banks had a nice run last year. BAC in particular, now it’s time for the big boys to trash the banking sector. They are short; and, want to make big money. Expect to see many negative stories about BAC and other banks. Just ride it out keep your stock. Buy oil it's the next sector to move up!
    10 Jan 2013, 02:25 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8661) | Send Message
     
    Each frivolous lawsuit keeps the stock price down so that I can accumulate more at an unbelievable 3x free cash flow.

     

    Keep 'em coming!!
    10 Jan 2013, 04:29 AM Reply Like
  • RALPHSCHAUSS
    , contributor
    Comments (58) | Send Message
     
    BofA has already been tried for this by other regulators. In the US,
    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)
    10 Jan 2013, 05:19 AM Reply Like
  • RALPHSCHAUSS
    , contributor
    Comments (58) | Send Message
     
    I meant to say " ten times" in the second line, sorry for the typo
    10 Jan 2013, 05:20 AM Reply Like
  • JohnnyLaw21
    , contributor
    Comments (3) | Send Message
     
    Yeah unfortunately, Ken Lewis saw Countrywide as his destiny - Countrywide was willing to restructure its debt however the 1 billion B of A had invested made it too easy for Mr. Lewis not continue with his manifest destiny approach which has been reversed some what successfully by Mr Moynihan.

     

    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.
    10 Jan 2013, 08:24 AM Reply Like
  • lcmucci
    , contributor
    Comments (17) | Send Message
     
    I have been hoping someone would explain Countrywide. I know they approved mortgages to anyone on even overpriced homes. That's what helped start the great scramble to buy a home at any price. They kept the fees but, who's money did they use? It couldn't have been their own. They had to borrow the money at a low interest rate and sell it at a higher rate. And when the borrowers defaulted, CW couldn't pay back it's loans and defaulted also. So why were they so valuable for BAC to pay four billion to plus pay all the billions in fines and litigation.
    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.
    10 Jan 2013, 04:34 PM Reply Like
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