Bank of America stock sunk on Tuesday following a hat-trick of attempts to block their $8.5 billion settlement with homeowners. In reverse chronological order:
- Homeowners are suing Bank of America in an attempt to block the deal, claiming "that the deal fails to address widespread servicing problems and would actually speed up foreclosures." [Dealbook]
- The Federal Deposit Insurance Corporation (FDIC) is objecting to the suit on regulatory grounds, because it "does not have enough information to evaluate the Settlement." Daniel Indiviglio thinks this "could get messy." [The Atlantic]
- U.S. Bancorp has filed a lawsuit on behalf of their investors over 4,400 mortgages from Bank of America's Coutnrywide unit. The suit demands that Bank of America "repurchase all of the loans in the mortgage pool because Countrywide had agreed to do so if it misled investors about the quality of the loans." [Forbes]
We'll be the first to admit that our June assessment of the deal and its reception on Wall Street was slightly optimistic.