How Did Bank of America Stay Positive Last Quarter?
A careful look at the news in the past couple weeks would have shown Bank of America (NYSE:BAC) wading through some sticky situations, or sticky litigation, that cost the bank billions. Now, a report of their quarterly earnings shows just how much money got “stuck” and taken from the bank.
Settlements and charges
One of the bigger settlements that faced Bank of America was the $10.3 billion dollar settlement with Fannie Mae over troubled mortgages. Under the terms of the settlement, Bank of America would give Fannie Mae $3.6 billion, while also spending $6.75 billion to buy back mortgages. This news was expected to leave the bank with a fourth-quarter net loss of $2.5 billion.
The bank also had to fork out $2.5 billion to settle regulators’ claims of foreclosure abuse. Another settlement totaling $2.43 billion was reached with shareholders last fall over accusations that Bank of America had misled investors about Merill Lynch’s health when it was taken over by BofA. Though smaller than the other payments issued in 2012, another $700 million was charged to the bank based on its perceived improvement in debt…