Bank of America to pay $8.5 billion settlement over mortgages. Stocks Rise 4%
Interesting article that came out from the Baltimore Sun. Bank of America has agreed to pay over $8.5 BILLION in bad loans. As a result, B of A stocks went up 4% fueling speculation that the bad days are now behind them.
“Citi analyst Keith Horowitz said the settlement, which amounts to only 2 percent of the original principal balance, removes one of the largest investor risks for Bank of America.
“We think this could prove to be a step forward” for Bank of America, Horowitz said. It would show investors that the bank can manage through crisis without raising additional capital.
As a result of the settlement, Bank of America put its second-quarter loss at $8.6 billion to $9.1 billion. Excluding the settlement and other charges, the bank expects to post a quarterly loss of $3.2 billion to $3.7 billion.
Shares of Bank of America Corp. jumped more than 4 percent, or 48 cents to $11.30 before the market opened, with investors happy that the bank can put very big uncertainty behind it.”
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