The Bank of America yesterday rebuffed claims by a lawyer for several big investors including the Federal Reserve Bank of New York that it should buy back troubled mortgages because the loans were allegedly made improperly, according to an article by Nelson D. Schwartz in today's edition of The New York Times.
The bank argued that the effort would have the effect of speeding up the foreclosure process and force it evict even more homeowners and it maintained that the problems stemmed from the economic downtown rather than any underlying problem with how the mortgages were sold to investors, the article said.
It called the claims of the investors, which also included Pimco, the money management firm, "utterly baseless" and criticized the lawyer behind the effort, Kathy D. Patrick, arguing that a letter she wrote last month that as signed by clients was "written for an improper purpose, or in furtherance of an ulterior agenda," the article said, adding that Ms. Patrick did not immediately respond to queries.
Since her letter was released, the bank's shares have slumped "on fears that investor efforts to force it to buy back mortgages - known as put-backs - could be a drain on earnings for years," the article said, adding that "in recent days, several reports by Wall Street research firms have estimated that the put-back claims could cost the industry $43 billion to $90 billion."
The bank argued that the effort would have the effect of speeding up the foreclosure process and force it evict even more homeowners and it maintained that the problems stemmed from the economic downtown rather than any underlying problem with how the mortgages were sold to investors, the article said.
It called the claims of the investors, which also included Pimco, the money management firm, "utterly baseless" and criticized the lawyer behind the effort, Kathy D. Patrick, arguing that a letter she wrote last month that as signed by clients was "written for an improper purpose, or in furtherance of an ulterior agenda," the article said, adding that Ms. Patrick did not immediately respond to queries.
Since her letter was released, the bank's shares have slumped "on fears that investor efforts to force it to buy back mortgages - known as put-backs - could be a drain on earnings for years," the article said, adding that "in recent days, several reports by Wall Street research firms have estimated that the put-back claims could cost the industry $43 billion to $90 billion."
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
6sqft delivers the latest on real estate, architecture, and design, straight from New York City.
