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Bank of America close to $8.5 billion mortgage securities settlement

29 June 2011

* It is reported that the Bank of America is close to a $8.5 billion mortgage securities settlement to address claims from a powerful group of 22 investors that lost money. The settlement originally reported by The Wall Street Journal must be approved by the Bank of America Board of Directors, would be the largest settlement in banking history.

* According to analysts, if the settlement comes to pass it could spark off claims against the other mortgage lenders such as JP Morgan Chase and Wells Fargo to name a couple. Reuters reported on Tuesday; If youre an investor, you now know this is a potential lottery ticket, and the only way you lose is by not playing, said Matt McCormick, a portfolio manager at Cincinnati-based Bahl & Gaynor Investment Counsel. You have to think this is the first settlement well be seeing in a long line.

* After the news broke of the possible settlement shares rose by 3.5 percent but eased back down to a 1 percent gain for the day.

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