Credit-default swaps on Bank of America, the nation's largest residential servicer, this week surged to the highest level since April 2009 before paring those gains.

The contracts have been pushed to the highest ever relative to its peers as investors speculate that B of A will have to bolster capital as mortgage investors sue to force the bank to buy back faulty home loans or pay damages on MBS.

According to combined news reports, Fannie Mae, in particular, has increased its buyback claims against the bank.

B of A is in the process of trying to sell some of its mortgage servicing rights.

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