A new report released this week claims that Bank of America could be penalized $60 billion concerning lawsuits on mortgage-supported securities, which includes more than 530 mortgage trusts sold by insurance company Country-Wide.
According to financial site The Motley Fool, a handful of analysts speculate that this loss can be ascribed to a penalty of $108 billion in losses. Over 22 investors, including BlackRock, PIMCo and Metlife, have felt this enormous gap in funds.
BITG Research's Mark Palmer told the Motley Fool that almost 56 percent of "the Countrywide MBSes MBIA insured had issues so odious that a lender would be too embarrassed not to repurchase them."
He estimated that the percentage loss would drop the $108 billion to around $60.5 billion.
This report followed a settlement between Bank of America and the aforementioned 22 investors.
Some of these investors are not happy with BofA, claiming that the bank put its own needs above others, after they changed aspects of the mortgage-supported securities,
Then, they didn't buy them back, leaving investors out in the cold.
One analyst told the Fool that damage done from not looking out for investors could cost the bank between $25 billion and $30 billion after all is said and done.
The report has surfaced amongst a withdrawal from the Federal Housing Finance Agency, as they have revoked their conditional objection to Bank of America's $8.5 billion settlement.
The Federal Housing Finance Agency is in charge of large loaning giants Freddie Mac and Fannie Mae. They support about half of all the United States' loans. In 2008, they were seized by the government over growing mortgage losses.
The U.S. government has also sued Bank of America in the past, for more than $1 billion concerning morgage fraud against Fannie Mae and Freddie Mac during the recession.
A New York court will rule whether or not the $8.5 billion settlement will be approved May 30.
