Bank of America Under Growing Pressure
Terry Laughlin, the head of a new Bank of America division managing foreclosures, is facing growing pressure from regulators and bond purchasers seeking retribution for the bank's role in the collapse of the US housing market.
The bank said in its annual report that it could be subject to "material fines" from the government's investigation into irregularities in how the bank processed foreclosures. The bank is also reportedly under fire from Pacific Management Co., a bondholder group that has recently almost doubled the number of mortgage deals on which it is challenging the North Carolina-based firm. BAC's legal costs related to foreclosure improprieties could be as much as $1.5 billion more than what it has set aside, the filing said.
Laughlin, meanwhile, was promoted earlier this month by BAC CEO Brian T. Moynihan to manage the costs of resolving disputes stemming to BAC's 2008 acquisition of Countrywide Financial Corp. After the bank set aside about $3 billion in late 2010 to settle complaints lodged by mortgage giants Fannie Mae and Freddie Mac, the bank has said that separate disputes could cost as much as $7 to $10 billion more.