Monday, March 21, 2011

BofA (BAC) Wins Countrywide Mortgage Round of $34 Million

Shares of Bank of America (NYSE:BAC) on Friday in response to a ruling they have, at least for now, won in a litigation case which would have cost them $34 million, and maybe more of other similar suits were to follow.

The litigation came from three Pennsylvania homeowners in 2007, alleged that the company overcharged for mortgage insurance while providing no services in return. Countrywide was also accused of accepting a portion of the premiums.

The case was reopened by the U.S. Court of Appeals in October 2009, ruling that a district court judged erred in dismissing the claims. Countrywide then required homebuyers who put less than 20% down on the mortgage to obtain private insurance through a pre-select group of providers, who then reinsured with Countrywide affiliate, Balboa Reinsurance Co. The homeowners claim the Balboa collected $892 million in reinsurance premiums since 1999, and never paid out any claims.

A final hearing on the matter is set for August 23, 2011.

Bank of America closed Friday at $14.04, up $0.06, or 0.43 percent.

No comments: