New Billion-Dollar Problem for Bank of America Corp (BAC)?

Page 1 of 2

The brouhaha over mortgage servicing mishaps and snafus doesn’t seem to be having much effect on Bank of America Corp (NYSE:BAC)‘s share price, particularly with all of the drama surrounding the Federal Open Market Committee’s meeting, which did a bit of market roiling all on its own.

Bank of America Corp (NYSE:BAC)

However, a lawsuit under way in Boston, alleging that Bank of America Corp (NYSE:BAC) deliberately derailed loan modifications offered under the government’s Home Affordable Modification Program, as well as the underwhelming National Mortgage Settlement monitor’s report released this week, have been attracting media attention.

Both of these issues are likely to have a negative effect on Bank of America Corp (NYSE:BAC)’s already tarnished customer-service reputation and might wind up costing the big bank additional wads of cash, if California state Representative Maxine Waters has her way.

HAMP incentive payments at issue
Waters, a ranking Democrat on the House Financial Services Committee, recently sent a letter to several government entities, including the Office of the Comptroller of the Currency, the Federal Reserve, and the Special Inspector General for the Troubled Asset Relief Program. Alerted by an article in Bloomberg concerning the homeowners’ lawsuit, Waters notes that Bank of America was the recipient of $992 million in HAMP loan modification incentives — not to mention the oodles of cash it was handed as part of TARP.

Of course, the current loan modification suit puts the spotlight squarely on Bank of America Corp (NYSE:BAC), but the report from settlement monitor Joseph A. Smith shows that each of the Big Four have had their problems in that area. Both Bank of America and JPMorgan Chase & Co. (NYSE:JPM) failed on two of at least 12 benchmarks used to assess the banks’ progress on the settlement, and Citigroup Inc (NYSE:C) and Wells Fargo & Co (NYSE:WFC) were lax on one each. JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc (NYSE:C) both had the good grace to admit their failures and declare that they were working on fixes; Wells Fargo & Co (NYSE:WFC) and Bank of America Corp (NYSE:BAC) had no comment, which, for the latter, may only make it look even less sympathetic in the public opinion.

Another lawsuit in the making?
It remains to be seen whether Waters’ request will prompt any action. Her letter asks that servicers that “you have reason to believe” were involved in any fraudulent behavior regarding HAMP be investigated — with Bank of America Corp (NYSE:BAC) being specifically mentioned, of course, because of the testimony in Boston.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!