Why Bank of America Corp (BAC) May Be Stumbling for a While

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It all boils down again to fee generation. The investigation alleges that the servicers were claiming the homes in question were still in the foreclosure process, while in fact they had been sold or paid off. Since the bond holders would have to pay fees while the homes were in foreclosure, this allowed the mortgage servicers to rake in the dough.

So now Bank of America Corp (NYSE:BAC) faces not only customer discontent, but also that from investors and future business partners in the MBS world. With its goal of capturing more of the mortgage market, the bank is in serious trouble following the newest revelations. Not to mention potential lawsuits — and we all know how those hurt the bank.

The article Why Bank of America May Be Stumbling for a While originally appeared on Fool.com is written by Jessica Alling.

Fool contributor Jessica Alling has no position in any stocks mentioned — you can contact her here. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.

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