Boston, MA, 11/21/2013 (wallstreetpr) – Bank of America Corp. (NYSE:BAC) is fighting multiple lawsuits regarding defective loans it sold to Freddie Mac and Fannie Mae. These relate to the time of the financial meltdown and Bank of America is not the only one affected. Recently, JPMorgan Chase & Co. (NYSE:JPM) reached a record breaking $13 billion settlement with the federal government in similar lawsuits. Bank of America Corp (NYSE:BAC) is arguing that it can pay a maximum of $1.1 million against the government’s demand of $863 million. These are in line with the tough line in settlements adopted by the bank’s CEO, Moynihan. His tough line has ensured that the bank has been able to negotiate some very good settlements with the federal government, private investors as well as bond insurers. The legacy left behind by Moynihan’s predecessor, Kenneth Lewis is taking a toll on the results of the bank even today. Kenneth had gone on an acquisition spree leaving behind the bank in a bad shape. The takeover of Countrywide Financial Corp led to a number of lawsuits in the lap of Bank of America Corp (NYSE:BAC).
Moynihan has disposed of more than $60 billion of assets and settled claims of $50 billion relating to mortgages. He is now focusing on improving the bank’s performance. On one hand, he is focusing on increasing the revenues by concentrating on the wealth management unit and on the other he is cutting costs. Bank of America Corp (NYSE:BAC) is cutting people as well as branches; it aims to have around 5,000 branches out of a total 6,100 current strength by the year end. The bank wants to focus on technology to ensure that customer service does not suffer. The low mortgage rates are also proving to be a blessing in disguise. Low unemployment along with low mortgage rates has lead to a good demand for new homes. These are being financed by mortgages.
The stock of Bank of America Corp (NYSE:BAC) was trading at $15.14 at the end of trading on November 20, 2013.