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BofA's $8.5 billion settlement won't be its last

(2011-06-30 22:52:34)












分类: 财经

BofA's $8.5 billion settlement won't be its last


NEW YORK (AP) -- Bank of America's $8.5 billion settlement with investors is the largest any bank has ever paid.

It might help assuage worries about how deep the bank's mortgage problems might be and how long it might take to settle them. But for the nation's largest bank and its CEO Brian Moynihan, the slate is far from clean.

The payout settles claims by just 22 investors who said Bank of America Corp. sold bonds based on substandard home mortgages. The bonds fell in value when the housing market collapsed and left the investors with losses on $424 billion worth of mortgages. The $8.5 billion settlement eclipses the last three years of earnings at the Charlotte, N.C. bank.

The uncertainty about just how bad Bank of America's mortgage issues might be has scared investors and led to a 31 percent decline in Bank of America's stock price since January of last year when Moynihan took over.

"This is a major step forward for our company," Moynihan said in a conference call with investors on Wednesday.

Wall Street is cheering the move, sending the stock up 3 percent, to $11.14 Wednesday. It has been one of the worst performing stocks in the S&P 500 index in the past year.

纽约(美联社)-- 美国银行向投资者支付85亿美元的庭外和解数额是有史以来所有银行支付之最。






But that rally could be short-lived. Analysts say the $8.5 billion is about double the amount they'd expected. The bank continues to fight other investor groups that are demanding similar settlements. Lawsuits from the Federal Home Loan Bank of Boston, bond insurers MBIA and Syncora Holdings linger. And Bank of America is likely to be ordered to pay a hefty portion of the estimated $20 billion multi-bank settlement over the mishandling hundreds of thousands of home foreclosures.

Paul Miller, a bank analyst at FBR Capital Markets, says he's concerned about the bank's ability to increase earnings at a pace that would make up for these higher costs. These worries are magnified by the fact that the economic recovery in the U.S. is slowing. That could reduce the number of loans the bank is able to make to consumers and businesses.

Bank of America is in worse shape than other major banks like JPMorgan Chase & Co. and Wells Fargo & Co. because of its purchase of Countrywide for $4 billion in 2008. What seemed like a bargain price for the country's largest mortgage lender has cost the bank tens of billions more in mortgage losses, regulatory fines, repurchases of poorly-written loans and expensive litigation. At the same time, Bank of America itself had written a fair amount of bad mortgages. As it stands, the bank services one out of every five U.S. mortgages.



美国银行的形势比摩根大通和富国银行要糟糕,因为它在2008年40亿美元的收购 Countrywide。用打折般的价格对美国最大的贷款发放机构的收购导致银行在借贷方面损失、管理罚金、收回形势糟糕的贷款和昂贵的诉讼方面数百亿美元的花费。同时,美国银行本身已签署不少恶性贷款。随着美国银行表态,每五个抵押贷款里就有一个是美国银行的贷款。

So even though most of the major banks sold the same kind of securities and have bad mortgages on their books, analysts say they are in better shape than Bank of America, which has $2.2 trillion in assets.

The other banks don't have the same pressure to put the mortgage woes behind them. In March, the Federal Reserve didn't allow Bank of America to increase its dividend, citing uncertainty about the depth of its mortgage problems. It was the only denial issued to any of the four largest U.S. banks. And it raised questions over whether the bank was strong enough to withstand another economic downturn.

The combined effect of the losses and the uncertainty prompted a reversal in the bank's longtime strategy of fighting claims from investors, Moynihan admits. Since the beginning of the year, the bank has struck large settlements with multiple investors totaling $12.7 billion.

Most of the settlements are with investors that had purchased mortgages or mortgage backed securities. They want banks to buy back mortgages that had misinformation about qualifications of borrowers who received them. During the housing boom, lenders such as Countrywide routinely gave mortgages to people without documenting their income or ability to pay. This was a key driver of the financial crisis.




大部分要求理赔的投资者都已购买形式抵押权证券或住房抵押贷款证券。投资者希望美国银行回购这些抵押贷款,因为这些贷款存在误报报贷款方能力信息。在房市膨胀期,像 Countrywide这样的放贷方在没有认证他们的收入或支付能力时例行公事班的向客户发放贷款。这是导致金融危机的关键。

In January, the financial institution paid $2.6 billion to settle buyback claims on home loans sold to Fannie Mae and Freddie Mac. In April, the bank agreed to pay up to $1.6 billion to Assured Guaranty Ltd., an insurer that also pressed the bank to repurchase shoddy mortgages.

Some industry analysts say the string of settlements could open the door for similar agreements between investors and other large banks that sold mortgages, including JPMorgan, Wells Fargo and Citigroup.

"It's like the tobacco lawsuits -- if Phillip Morris loses, it affects everyone else," said Matt McCormick, a portfolio manager and banking analyst at Bahl & Gaynor Investment Counsel in Cincinnati, which manages about $4 billion in assets. He says banks face multiple issues, ""none of which are easy or inexpensive fixes."

Even if other banks are pushed into settlements now, the amounts will likely be less eye-popping, because Bank of America has more exposure to bad mortgages.



“这好比会上瘾的诉讼,如果PS失败,这会影响到其它每一个人,”辛辛那提市Bahl & Gaynor投资顾问公司投资组合经理和银行分析家MM说到。此公司经营着大约40亿美元资产。MM称银行面对多家诉讼,“没有一个诉讼是易于或者花很少钱就可以解决的。”


Bank of America's chief financial officer Bruce Thompson said in a conference call with analysts that by the end of the second quarter the bank would place $20 billion in reserves to cover costs related to future litigation and investor demands.

As a result of Wednesday's settlement and other mortgage-related costs, Bank of America said it will take a $14 billion charge in the second quarter and will report a net loss of $8.6 billion to $9.1 billion in the second quarter of 2011. That's up to 93 cents per share. The bank reports second quarter results on July 19.






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