Sequel to a recent news story by Richa Naidu published on October 20 on reuters.com regarding U.S. housing watchdogs which are seeking to fine Bank of America over $6 billion for its involvement in deceiving mortgage agencies during the housing boom, DigitalOlympus.com comments on the report.
According to the reuters.com news report, the fine which the regulators are seeking is in comparison to the $4 billion to be paid by JPMorgan Chase & Co according to reports by the Financial Times on its website quoting sources familiar with the issue. The Federal Housing Finance Agency (FHFA), seeking claims on behalf of finance agencies Fannie Mae and Freddie Mac that supports about half the existing U.S. home loans, are pursuing the penalty.
“The decision by the U.S. housing regulators to set the records straight would go a long way in resolving the issues surrounding the mortgage agencies,” says DigitalOlympus.com principal researcher Josh Cole. “The agencies involved can employ firms that specialize in litigation support services on how to back up their claims with the right proofs.”
The reuters.com news story further indicates that the FHFA and Bank of America (BofA) could not be contacted for comments beyond the routine business hours. The mortgage lender purchased by BofA in July 2008, Countrywide Financial Corp, has cost the bank over $40 billion in litigation expenses and other charges tied to its bad subprime mortgages. In the recent quarter, the bank sets aside an extra $300 million for mortgage litigation.
In a statement following the report, DigitalOlympus.com spokesperson said “While the purchase BofA made in July 2008 has involved the firm in several litigations, other companies can take a cue from this by seeking experts in due diligence investigations before acquiring a firm, to avert such challenges.”
As a financial news and technology research blog DigitalOlympus.com is committed to providing its readership with useful information as they unfold, to give them the relevant exposure they may require in relation to their business.