Is Bank of America About to Pay Out Billions More Dollars?
New York State's attorney general is on the march again. This time against Bank of America for potential securities violations committed during the housing boom. Good grief. How much more can one bank take?
One busy guy
Eric Schneiderman's latest investigation was revealed in a Thursday SEC filing by B of A. According to Bloomberg News, Schneiderman is "probing the [bank's] purchase, securitization and underwriting of home loans and mortgage securities."
Last October, it was revealed that Schneiderman was coming after JPMorgan Chase for securities fraud committed by its Bear Stearns unit in the run-up to the financial crisis. In yesterday's SEC filing, B of A said it "'continues to cooperate fully' with the investigation."
The gift that keeps on giving
Less than two months ago, B of A agreed to pay more than $10 billion to government-run housing giant Fannie Mae to settle allegations over troubled mortgages. In 2012, the superbank agreed to pay $1 billion to the federal government over subprime loans generated by Countrywide, and $11.8 billion to a nationwide settlement over foreclosure abuses.
When the $10 billion January settlement was reached, some B of A bulls declared it to be the last the bank and its investors would ever hear about the financial crisis: that this massive bill due for financial crisis missteps and misdeeds would be the final bill due.
I said it then, and I'll say it again now: The big banks haven't heard the last of the financial crisis. If JPMorgan and B of A remain susceptible to Schneiderman's investigations, surely Citigroup and maybe even Wells Fargo do, too: both banks did massive amounts of housing-boom lending.
But maybe nothing will come of this latest crisis-related B of A eruption. Maybe New York's attorney general will find that all of the bank's books are in perfect order. Speaking of New York, if you believe that, I have a bridge you might be interested in buying.
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The article Is Bank of America About to Pay Out Billions More Dollars? originally appeared on Fool.com.Fool contributor John Grgurich owns shares of JPMorgan Chase. Follow John's dispatches from the bleeding heart of capitalism on Twitter @TMFGrgurich.The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a lovely disclosure policy.
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