Talking about Bank of America Deal on Loan-Repurchase Demands Sets `Template’ for Banks – Bloomberg

 

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Bank of America Deal on Loan-Repurchase Demands Sets `Template’ for Banks – Bloomberg

Bank of America Corp.’s agreement to settle Fannie Mae and Freddie Mac’s demands it buy back billions of dollars in faulty loans may pave the way for U.S. lenders to resolve similar disputes with the government-sponsored entities, easing investors’ concerns that costs may surge.  Bank of America’s announcement yesterday that it settled claims on at least $4.1 billion in loans from its Countrywide Financial Corp. unit sent the KBW Bank Index of 24 stocks up 2.3 percent to its highest level since May. A willingness by the GSEs to negotiate may let other lenders cap costs from mounting demands they buy back loans that allegedly had bad or incomplete information about borrowers’ incomes, home values or other data.  “It’s unlikely GSE claims could spiral out of control from here,” “I think that’s a positive broadly for the group,"

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