Tomahawk, WI 02/05/2014 (BasicsMedia) – Bank of America Corp (NYSE:BAC) has been on a tussle with a group of mortgage investors for quite some time now. The mortgage securities investors underwent huge losses through their investments in Bank of America. In 2011, the bank and these particular investors agreed on a settlement, which would see this matter settled for good. The agreement the two entered into was to cater for some of the losses that the mortgage securities investors experienced. The matter has been in court ever since, until now when a New York judge said it could proceed as planned.

The ruling by Justice Barbara R. Kapnick excluded some of the claims that the mortgage securities investors had made. Under the previous agreement between the two companies, borrowers received a reprieve and were allowed to stay in their houses without further harassment. The $8.5 billion that Bank of America Corp (NYSE:BAC) will pay these mortgage securities investors is only a portion of what they may end up paying to settle the whole list of claims. What this means is that Bank of America stands to pay more money to settle the claims that these investors raised.

The ruling made in the New York court by Justice Kapnick, was issued to cover the losses that were brought about by Countrywide Financial, which belonged to Bank of America Corp after purchasing it in 2008. Countrywide Financial remains the one mistake that has cost Bank of America a great deal of money, and from the look of things, it will pay more to settle all these claims. This will probably have a disastrous effect on Bank of America’s financial reports in the coming quarters of 2014, just when it seemed that the bank was on its way to a turnaround.

Currently, lawyers representing both Bank of America Corp (NYSE:BAC) and the affected investors are poring through the details of the ruling made by Justice Kapnick to find out how it affects them. The earlier understanding was that Bank of America had come out victorious and the clear winner in this case. However, after thorough perusal of what the entire ruling entails, it is now safe to say that Bank of America will lose more than it imagined. The $8.5 billion will keep rising once the full import of Justice Kapnick’s ruling hits home. BAC will pay more than the money mooted.

Some of the parties that were involved in the case include Bank of America Corp (NYSE:BAC), Bank of New York Mellon, and American International Group Inc (NYSE:AIG), which believes that investors were shortchanged. Moreover, according to AIG, the Bank of New York Mellon never fought aggressively to protect investors by demanding for more money from BAC. AIG believes that the $8.5 billion that the court awarded is insufficient and only represents a fraction of the money that BAC should pay to mortgage securities investors in the coming years.

The money that Bank of America Corp (NYSE:BAC) is to pay is huge for any bank in the US, no matter its size. The figures being mentioned right now range between $11 billion and $20 billion, which would have a major negative effect on the bank’s overall financial position.

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