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Bank of America Corporation

6/20/2013, 8:13 AM ET

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Wednesday, June 19, 9:06 AM Bank of America (BAC), JPMorgan (JPM), Citigroup (C), and Wells Fargo (WFC) have failed to comply with parts of the $25B national mortgage settlement, according to Joseph Smith, the independent monitor appointed to oversee the process. "We still have work to do on the loan modification process," he says. His findings jibe with anecdotal reports and comes as the NY AG has signalled his intention to sue the banks over violations. 14 Comments [Financials, Top Stories]
Monday, June 17, 10:12 AM Deutsche Bank (DB) is leading a wave of big banks ramping up exposure to single-family housing by extending credit to Wall Street firms so they can buy up homes to turn them into rentals. The bank reportedly just lent another $1.5B to Blackstone (BX) after an earlier $2.1B line got used up. Wayne Hughes' American Homes 4 Rent has as much as a $1B line from Wells Fargo (WFC), and SilverBay Realty (SBY) just inked a $200M facility from Bank of America (BAC) and JPMorgan (JPM). 14 Comments [Financials]
Monday, June 17, 9:28 AM Bank of America's (BAC) Article 77 hearing is on hiatus until July 8 to allow the presiding judge time on other cases. Day 8 of the hearing was an uneventful one, reports Mark Palmer, notable mostly for the judge admonishing an attorney representing the supporters to quit coaching (through gestures) a witness on the stand. 10 Comments [Financials]
Friday, June 14, 11:53 PM Former employees allege Bank of America (BAC) gave out cash bonuses and gift cards as rewards for denying loan applications and illegitimately modifying customers' files in order to make them "ineligible for loan modification," Bloomberg says. One "loss-mitigation specialist" claims staff were "regularly drilled … to maximize fees … by extending delay of the Home Affordable Modification Program process" by any available means. "At best, these attorneys are painting a false picture of the bank’s practices," a BAC spokesperson says dryly. 42 Comments [Financials]
Wednesday, June 12, 11:19 AM Wells Fargo (WFC -0.2%) and U.S. Bancorp (USB -0.2%) are both downgraded to Sell by Atlantic Equities' Richard Staite, who says valuations and earnings expectations are already high, leaving little room for upside surprises. Wells is likely "overearning" relative to normal capacity thanks to previously high (now, not so much) refinance volumes. His top pick is Bank of America (BAC -0.4%), currently "underearning" by as much as 50% thanks to high legal and asset servicing costs. 2 Comments [Financials]
Tuesday, June 11, 9:33 AM Bank (C, BAC, JPM, WFC) overdraft protection raises the eyebrows of the CFPB, which questions how lenders are selling this product and whether fees can really be anticipated and thus avoided. The bureau notes consumers who opt in to such programs end up paying more in costs. "What is ofter marketed as overdraft protection may actually be putting consumers at greater risk." As of yet, no action or fines have been announced. 7 Comments [Financials]
Tuesday, June 11, 8:10 AM Day 5 of Bank of America's (BAC) Article 77 hearing is notable for Chief Risk Officer Terry Laughlin's admission under cross that he had not gotten clearance from OCC about putting Countrywide into bankruptcy (a claim thought to have been made on Day 2). What Laughlin meant, he says, is that in his opinion, he did not see regulators as being an "impediment to bankrupting Countrywide." The hearing continues today. 6 Comments [Financials]
Friday, June 7, 7:05 AM Macquarie initiates coverage on a few big-cap financials, labeling Morgan Stanley (MS) and Citigroup (C) Outperform with $30 and $62 price targets, respectively, and Bank of America (BAC) Underperform with $12 price target. Comment! [Financials]
Thursday, June 6, 3:15 PM "It was not the bondholder group that caved," says Pimco's Kent Smith. "Bank of America (BAC) did." Smith was present at settlement talks in 2011 between BofA and the largest investors in soured MBS. Contrary to the glad-handing described by the settlement "objectors," the meetings were hostile, says Smith (testifying at the Article 77 hearing), with BofA's initial position being the grandchildren of the grandchildren of the investors would never recover a dime. The bondholder group eventually got $8.5B. 5 Comments [Financials]
Thursday, June 6, 6:50 AM National Australia Bank (NABZY.PK) - Oz's largest - and Wells Fargo (WFC) are exploring a joint venture to bring Australian borrowers to the U.S. term loan B (TLB) market, reports Reuters. The TLB market is basically junk bonds, and the lucrative business is currently dominated by global banks such as JPMorgan (JPM) and Bank of America (BAC). 3 Comments [Financials]
Wednesday, June 5, 9:36 AM Day 2 of Bank of America's (BAC) Article 77 hearing led off with a new revelation: Chief Risk Officer Terry Laughlin in Nov. 2011 told the 22 institutional investors in favor of the settlement the bank had been given permission to put Countrywide into bankruptcy if the mortgage lender's liabilities threatened the BofA's viability - the message clearly being the $8.5B settlement was a pretty good outcome for those suffering losses. Naturally, the "objectors" say there were other options rather than signing off on a "sweetheart deal." 7 Comments [Financials]
Wednesday, June 5, 7:56 AM More on Mortgage applications: The refinance index dove 15% to its lowest level since November 2011 as the average 30-year fixed-rate mortgage jumped 17 bps to 4.07%, the highest in more than a year. The index is now off about 40% in a month. Mortgage REITs (MORT,, REM) certainly face a few issues at the moment, but prepayment risk is no longer one of them. Struggling enough finding growth, the refinancing cash cow benefitting the big banks (WFC, BAC, JPM, C isn't producing at the moment. 11 Comments [U.S. Economy, Financials]
Tuesday, June 4, 3:07 PM Day 2 of Bank of America's (BAC) Article 77 hearing finds an AIG lawyer arguing those who approved the $8.5B settlement - including BlackRock (BLK) and MetLife (MET) were conflicted and never investigated how much money investors actually lost on the MBS originally valued at $105B. A lawyer for BlackRock says it and other firms agreed to the settlement rather than risk BofA putting Countrywide into bankruptcy. Observing the proceeding, Mike Mayo says there's "significant legal tail risk" for BofA. 24 Comments [Financials]
Tuesday, June 4, 12:04 PM Wells Fargo (WFC) and Bank of America (BAC) have been ordered by Finra to pay more than $3M (not a typo) to customers who suffered losses after being steered into floating-rate funds in 2007 and 2008. Finra is also tacking on its own $2.15M fine. "As investors continue to look for yield in a low-interest rate environment ... firms need to ensure that investment recommendations are consistent with customers' investment objectives." 9 Comments [Financials]
Tuesday, June 4, 7:27 AM Report from Day 1 of Bank of America's (BAC) Article 77 hearing: After several hours of pre-hearing motions - which included a request for delay from the attorney representing the "objectors group" (including AIG) - the hearing got under way. While BofA is the de facto defendant, the actual defendant is BNY Mellon (BK) - the trustee for the 530 Countrywide mortgage trusts at issue. The defendants may want quick resolution, but the Judge told the parties "we're not going to be done with this in June." 19 Comments [Financials]
Monday, June 3, 12:47 PM Mark Palmer reiterates his caution on Bank of America (BAC -2.4%) as the Article 77 hearing over its $8.5B MBS settlement gets underway. Stakes are high given BofA has reserved just $8.5B for potential payouts, but objectors - including AIG, Triaxx, and 3 FHLB banks - will point to recoveries received by MBIA and Ambac north of $0.60 on the dollar. With losses at $108B - well, you do the math. Yes, the bar for the objectors to overcome is a high one, but - thanks to a series of recent rulings - not as high as a year ago. 6 Comments [Financials]

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