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BofA, MBIA Agree to Mortgage Deal (WSJ)
Bank of America Corp (NYSE:BAC) +5.23% agreed to pay MBIA Inc. (NYSE:MBI) +45.37% $1.7 billion to settle a dispute over soured mortgage securities issued during the U.S. housing boom, eliminating major legal uncertainties for both companies. The pact comes as MBIA faced a rise in mortgage-related claims, and it will keep the Armonk, N.Y., company’s insurance unit from being taken over by the New York state financial regulator, said people familiar with the deal. Shares of both companies rose on the news. MBIA Inc. (NYSE:MBI) rocketed 38% and Bank of America Corp (NYSE:BAC) advanced 4.6%.

Cash rates realign with cut in the repo rate (ET)
Cash rates is at 7.30/7.35 per cent, in line with the cut in the repo rate to 7.25 per cent by RBI on Friday. The call rate dropped to 7.10/7.20 per cent at Friday close. The Reserve Bank of India desists from lowering cash reserve ratio, but says will actively manage liquidity. RBI will buy back bonds up to Rs 100 billion on Tuesday. Bank of America Merrill Lynch expects the RBI to conduct OMOs to the tune of 1.6 trillion in FY14, assuming a 50 basis points cash reserve ratio cut in fiscal second half.

New York state to sue Bank of America, Wells Fargo (ET)
New York state Monday announced plans to sue Bank of America Corp (NYSE:BAC) and Wells Fargo & Co (NYSE:WFC) for violating a 2012 settlement aimed at addressing widespread mortgage lending abuses. New York Attorney General Eric Schneiderman said the two banks had “repeatedly” flouted the terms of the $25 billion March 2012 settlement that makes it easier for homeowners to seek loan modifications. Under the terms of the settlement, the banks are to expeditiously notify consumers of the receipt of loan modification applications and abide by a time-frame for processing the application.