Bank of America Corp (BAC): The Newest Assault on Its Profits

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As for Bank of America Corp (NYSE:BAC), it still faces two onerous lawsuits, neither of which has been moving in a favorable direction for the bank. One is the lawsuit brought by investors including BlackRock, Inc. (NYSE:BLK) and Pimco CA Muni. Income Fund III (NYSE:PZC), which was settled back in 2011 for $8.5 billion, but has now been reopened because of findings by the plaintiffs that B of A acted more in its own interest than that of investors when modifying mortgages. If the settlement is not affirmed by a judge, the bank may wind up owing much more.

The other is the battle in which it is embroiled with mortgage insurer MBIA Inc. (NYSE:MBI) . As I pointed out recently, things have not been going the bank’s way, and it could very well be stuck paying out on loans that haven’t even defaulted yet. We’re talking about $3 billion in recompense that MBIA wants from Bank of America Corp (NYSE:BAC), not chicken feed, by any stretch.

Unfortunately for the megabank and its investors, it looks like Bank of America may be looking at another year of pinched profits as it continues to mop up one messy legal muddle after another.

The article The Newest Assault on Bank of America’s Profits originally appeared on Fool.com is written by Amanda Alix.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends BlackRock and Wells Fargo. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo.

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