Bank of America Weighs Foreclosure Deal

Detroit community residents and organizers came out to defend the home of Rubie Curl-Pinkins who was facing foreclosure by Bank of America. This demonstration was held on July 18, 2008. (Photo: Alan Pollock)., a photo by Pan-African News Wire File Photos on Flickr.

BofA weighs foreclosure deal: report

Aug 17 2011 1:40am EDT

(Reuters) - Bank of America Corp may settle a state and federal probe of foreclosure practices in a deal that lets New York proceed with an inquiry into securitizations, Bloomberg reported citing two people with direct knowledge of the matter.

The firm may pursue an accord with most of the 50 state attorneys general, even if it omits New York's attorney general Eric Schneiderman, said one of the people, Bloomberg reported.

BofA did not immediately respond to an email seeking comment outside regular U.S. business hours.

The company executives, concerned that a delay in resolving the case is hurting the firm's stock, are open to a deal that would resolve most of it, even if some mortgage investigations continue, said one of the people.

In late June, BofA agreed to an $8.5 billion deal to settle an eight-month dispute with outside investors who bought Countrywide Financial Corp mortgage bonds. The deal, which must be approved by a New York court, applies to all investors in nearly all Countrywide Financial-created mortgage bonds.

The investors -- including Pacific Investment Management Co, or PIMCO, and BlackRock Inc -- requested the bank repurchase toxic home loans that comprised a series of mortgage-backed securities.

Schneiderman has said in court papers that the proposed settlement was "both procedurally and substantively flawed." He and Delaware attorney general Beau Biden, both Democrats, have ongoing investigations into the mortgage system.

Negotiations with regulators and the five largest mortgage servicers including Bank of America, JPMorgan Chase & Co, Citigroup Inc, Wells Fargo & Co and Ally Financial Inc have been bogged down over details of the proposed deal, people with knowledge of the talks told Bloomberg.

(Reporting by Soham Chatterjee in Bangalore)

Read more: http://www.portfolio.com/business-news/reuters/2011/08/17/bofa-weighs-foreclosure-deal-report#ixzz1VGR6eEw2