Some may remember I have said I had a feeling BAC was in big trouble.
Good article on Zero Hedge tells why. A mortgage fraud settlement agreement with BAC has been challenged by
New York Attorney General Eric Schneiderman. That old mortgage fraud by CountryWide has come back to bite BAC
AND Bank of NY Mellon in the hind end.
Here is excerpt/summary, which is found halfway down the article by Durden:
"Long story short: Bank of America is now totally skewered (as in can you spell U-N-D-E-R-R-E-S-E-R-V-E-D), as this process throws the entire existing settlement, which most certainly was cobbled together with the assistance of the purported legal adversaries so that the American financial system was not scuttled when BAC has to file for bankruptcy, out of the window.
Now that a politically upstart AG is in the pic, and now that he has raised some serious rucus, we expect, as noted above, that the final settlement ask will increase by about $15-20 billion, and in the process sent the company's CDS soaring as the fear of counterparty risk suddenly rears its ugly head in a self-fulfilling prophecy along the same lines as took down Lehman Brothers.
Prepare for a Bank of America public offering. And for our Paulson & Co. LP readers: pray that the billionaire sold his remaining shares in this toxic dump of a bank on which he once upon a time had a $30 price target."
Fun reading, here:
http://www.zerohedge.com/news/got-bank-america-cds-new-york-ag-says-bacs-85-billion-settlement-unfair-and-misleading-bac-equi"