BofA's (BAC) Countrywide Wins Tentative $34M Mortgage Suit
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Bank of America (NYSE: BAC) shares saw a little bit of a pop this afternoon, following reports that their Countrywide mortgage unit had tentatively won a $34 million settlement.
The litigation brought about by three Pennsylvania homeowners in 2007, alleged that the company overcharged for mortgage insurance.
A final hearing on the matter is set for August 23, 2011.
The case was reopened by the U.S. Court of Appeals in October 2009, ruling that a district court judged erred in dismissing the claims. Countrywide then required homebuyers who put less than 20% down on the mortgage to obtain private insurance through a pre-select group of providers, who then reinsured with Countrywide affiliate, Balboa Reinsurance Co. The homeowners claim the Balboa collected $892 million in reinsurance premiums since 1999, and never paid out any claims.
Countrywide was accused of accepting a portion of the premiums, and providing no services in return.
BAC stock is up 0.4% today, though its been on a slight downward trend since midday.
The litigation brought about by three Pennsylvania homeowners in 2007, alleged that the company overcharged for mortgage insurance.
A final hearing on the matter is set for August 23, 2011.
The case was reopened by the U.S. Court of Appeals in October 2009, ruling that a district court judged erred in dismissing the claims. Countrywide then required homebuyers who put less than 20% down on the mortgage to obtain private insurance through a pre-select group of providers, who then reinsured with Countrywide affiliate, Balboa Reinsurance Co. The homeowners claim the Balboa collected $892 million in reinsurance premiums since 1999, and never paid out any claims.
Countrywide was accused of accepting a portion of the premiums, and providing no services in return.
BAC stock is up 0.4% today, though its been on a slight downward trend since midday.
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