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
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!