Bank of America this week reiterated to investors that it has recognized up to 75% of expected claims tied to loan repurchase requests from Fannie Mae and Freddie Mac.
During its "Investor Day" presentation to analysts the nation's largest residential servicer also said its "possible loss" on private label MBS buybacks could top $10 billion, but noted that such a hit is not likely.
Terry Laughlin, recently appointed to head the bank's "legacy asset" servicing division, said the new unit will only service discontinued products such as interest only loans and payment option ARMs as well as mortgages that are at least 60 days or more past due.
In a new analyst report, Credit Suisse said it believes BofA provided a "thorough review" of its challenges and strategies, rating the stock an "outperform."
In early January BofA agreed to pay $2.8 billion to Fannie and Freddie to resolve outstanding repurchase requests on loans Countrywide Financial Corp. (CFC) sold to the GSEs during the housing boom. (BofA bought CFC in mid 2008.)
Some mortgage insurance executives believe the settlement was a good deal for the bank, but not so good for taxpayers who will continue to bolster Fannie and Freddie's capital position.
