Tag Archive | "wednesday morning"

Bank of America Pays $8.5 Billion Mortgage Settlement

Bank of America has agreed to pay $8.5 billion to resolve claims that the financial and insurance company sold mortgage-backed securities that are of low-quality before the collapse of the housing market.

The deal came after a group of investors insisted that the North Carolina-based company repurchase $47 billion worth of mortgages that the Countrywide unit sold in bonds. The agreement between parties was announced Wednesday morning.

The investors argued that Countrywide, which was bought by Bank of America for $4 billion in 2008, expanded itself at the investor’s price by servicing bad loans and continuing servicing fees. Bank of America has denied such allegations.

The mortgage settlement would reduce future uncertainty in the banking industry and resolve the issues caused by their acquisition of Countrywide, said Brian Moynihan, chief executive officer of Bank of America, on Wednesday.

The settlement, which covers 530 trusts with $424 billion principal balance, is subject to the approval of the court.

According to Keith Horowitz, a Citi analyst, the settlement that is equivalent to only 2% of the original principal balance, eliminates one of the biggest risks of investors for Bank of America.

Also, the settlement puts Bank of America to a second-quarter loss between $8.6 billion and $9.1 billion. The bank is expected to release a quarterly loss between $3.2 billion and $3.7 billion, not including the settlement and other charges.

The Bank of America Corp had a 4 percent increase in shares to $11.30 before the market opened. The investors are glad that the bank can place huge uncertainty behind it.

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Tropical Storm Nicole Hits Jamaica; Nine People Confirmed Dead, Many are still Missing

The short-lived tropical storm Nicole lashed Jamaica on Wednesday, leaving at least nine people dead and many others are still missing. The storm triggered flash-flooding in some areas in Jamaica while it caused dumped heavy rain on Cuba, Florida, Bahamas and the Cayman Islands.

The deadly storm was formed on Wednesday morning as it disappeared on Wednesday afternoon. Its short-lived occurrence deemed U.S and Cuban meteorologist to disagree on whether it is a tropical storm at all.

According to the weather forecasters from the U.S National Hurricane Center located in Miami, Nicole’s peak sustained winds were running at 40 miles per hour. This is just one mile per hour more than the 39 mph threshold for it to be called as storm.

However, Jorge Rubiera, Cuba’s top meteorologist said that the tropical storm did not exist. Cuban forecasters said that Nicole’s top winds as it reached their island was only 37 mph.

But, U.S forecasters believed that Nicole has a poorly defined circulation center, and that it has a marginal system. Cuban forecasters think that it is not a storm since they are on the other side of the margin.

Nicole dissipated into thunderstorms and was forecast to travel north to northeast over the Atlantic on Wednesday night. By Friday, it would arrive in U.S Mid-Atlantic States.

The storm caused sudden floods that drowned a teenage boy, two elderly men and a family of six. There were several roads blocked with mudslides and standing water, the bridges collapsed and several farmers lost crops and livestock. The storm also caused power shutdown over 300,000 households.

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