BofA: Night of the Living Dead?

One of the last photos taken of the Countrywide Financial executive team. Anthony Mozillo, second from right.

Inquiring minds are watching Bank of America’s legal expenses pile up, thanks to another big lawsuit which came to light Tuesday from investors who bought mortgage backed securities, stuffed with home loans made by Countrywide Financial:

Bank of America saw $1.5 billion on litigation expenses in the fourth quarter of 2010, up from $500 million in the previous quarter, according to financial statements.
For the year, Bank of America spent some $3 billion on litigation. Those costs do not include “special items,” such as a $3 billion settlement with Fannie Mae (FNMA_) and Freddie Mac(FMCC.OB) over Countrywide MBS or a $2 billion “goodwill impairment charge,” in Bank of America’s Home Loans and Insurance Business.
That last charge reflects a $2 billion drop in the estimated value of the business segment “as a result of increased uncertainties, including existing and potential litigation exposure and other related risks, higher servicing costs including loss mitigation efforts, foreclosure-related issues and the redeployment of centralized sales resources to address servicing needs,” according to a Jan. 3 filing Bank of America made with the Securities and Exchange Commission.

If only it stopped here. However, not only are there severe problems on this side of their business, private investors are gathering to air their grievances:

Private investors are also suing Bank of America over Countrywide MBS. The highest-profile private investor suit to date being brought against the bank comes from BlackRock(BLK_), Pacific Investment Management Co. the Federal Reserve Bank of New York, MetLife(MET_) and other investors.
However, on Tuesday, Bloomberg reported that several other big companies, including New York Life Insurance Co, TIAA-CREF, and Dexia Holdings had filed a new suit, accusing Bank of America of “massive fraud.”

If this were a movie trailer the voice over would say, “In the incredible thriller, Attack of the Zombie Bank, watch as Countrywide Financial terrorizes from the beyond the grave!” or “WATCH as Countrywide Financial walks the earth with other zombie institutions eating the living…”


One Response

  1. BofA is a zombie bank.

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