Bank Of America Rebuffs Mortgage Letter From Investors
October 19 2010 - 5:37PM
Dow Jones News
Bank of America Corp. (BAC) said Tuesday it will "vigorously
defend" itself against demands from a group of investors that it
take back billions of dollars in failing mortgages originally
issued by the Charlotte bank's Countrywide subsidiary.
"We're not responsible for the poor performance of loans as a
result of a bad economy," the bank said in a statement. "We don't
believe we've breached our obligations as servicer. We will examine
every avenue to vigorously defend ourselves."
The Federal Reserve Bank of New York, BlackRock Inc. (BLK) and
The Pacific Investment Management Co., a unit of Allianz SE
(ALIZF), are all investors named in the letter, said people
familiar with the matter.
Shares in Bank of America spiralled Tuesday afternoon after
investors named in the letter surfaced. They closed down 4.4%, to
$11.80.
Bank of America bought Countrywide in 2008 during the depths of
the financial crisis. The New York Fed inherited its positions in
the Countrywide securities through its 2008 rescues of Bear Stearns
Cos. and American International Group Inc. (AIG).
-By Marshall Eckblad, Dow Jones Newswires; 212-416-2156;
marshall.eckblad@dowjones.com