mankap Posted January 7, 2013 Share Posted January 7, 2013 It should help BAC in reducing no. of consultants and lawyers reviewing the foreclosures. It should also remove one more uncertainty on the liabilities front. Link to comment Share on other sites More sharing options...
ericd1 Posted January 7, 2013 Share Posted January 7, 2013 Worth at least a $1.00 a share! Link to comment Share on other sites More sharing options...
meiroy Posted January 7, 2013 Share Posted January 7, 2013 Worth at least a $1.00 a share! The amount in the agreement is reserved for? Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 7, 2013 Share Posted January 7, 2013 Otherwise I'm pretty much invested in BAC & AIG,... and still keep my old FFH as this other counterweight, with also some minor positions in LUK & BRK. But seriously, I wouldn't rebalance anything now into a place holder. BAC & AIG are still relative cheap compared with what I expect to receive in future look through earning streams with them. At almost/around half BV something,... ~1% of future ROA stream, yields ~10%ROE, thus almost 20% on something at half BV. I even went into margin a little to juice up my equity in the last year. AIG is the one that I've been thinking about this weekend. BAC has recently run 30% since the Q3 earnings were released and during the same period AIG has actually declined a little bit. Going into the AIG warrants again would accomplish a bit of diversification and that 2021 expiry pushes market risks out much further than 2015 BAC LEAPS. Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 7, 2013 Share Posted January 7, 2013 Eric, We have moved some BAc capital into both AIG and citi...BAC has blown both away in returns...congrats on all of your hard work! Dazel. Link to comment Share on other sites More sharing options...
Guest Dazel Posted January 7, 2013 Share Posted January 7, 2013 http://finance.yahoo.com/news/bank-america-announces-settlement-fannie-123000249.html Pre market prices like the deal! Link to comment Share on other sites More sharing options...
mankap Posted January 7, 2013 Share Posted January 7, 2013 Number of 60+ Day Delinquent Loans Declined to 775,000 at December 31, 2012 From 936,000 at September 30, 2012 MSR Sales Expected to Include 232,000 60+ Day Delinquent Loans I think this is what is moving the market. This is a 17% reduction in 60+ delinquency in 1 qtr. I hope to see substantial reduction in qtry expense. Link to comment Share on other sites More sharing options...
mankap Posted January 7, 2013 Share Posted January 7, 2013 PTPP for 4Q could be approx. 5B. BAC said that it expects modestly positive 4Q earnings after the following provisions. 2.7 B negative hit to Net Income from Fannie settlement. 2.5 B negative hit because of foreclosure reviews 700 m negative DVA valuation 1.3B positive tax impact So in total total negative impact is 4.6B. Despite $4.6B impact BAC will show positive earnings. Link to comment Share on other sites More sharing options...
jay21 Posted January 7, 2013 Share Posted January 7, 2013 http://finance.yahoo.com/news/bank-america-announces-settlement-fannie-123000249.html Pre market prices like the deal! "As part of the agreement to settle representations and warranties claims, Bank of America will make a cash payment to Fannie Mae of $3.6 billion and also repurchase for $6.75 billion certain residential mortgage loans sold to Fannie Mae, which Bank of America has valued at less than the purchase price. These actions are expected to be covered by existing reserves and an additional $2.5 billion (pretax) in representations and warranties provision recorded in the fourth quarter of 2012. Bank of America also agreed to make a cash payment to Fannie Mae to settle substantially all of Fannie Mae’s outstanding and future claims for compensatory fees arising out of past foreclosure delays. This payment is expected to be covered by existing reserves and an additional provision of $260 million (pretax) recorded in the fourth quarter of 2012. Together, these actions described above are expected to reduce Bank of America’s pretax income by approximately $2.7 billion in the fourth quarter of 2012. The Fannie Mae agreement also clarifies the parties' obligations with respect to mortgage insurance, including by establishing timeframes for certain payments and other actions, as well as parameters for potential bulk settlements and by providing for cooperation in future dealings with mortgage insurers. Through these actions, Bank of America is addressing substantially all of its remaining exposure to repurchase obligations for residential mortgage loans sold directly to Fannie Mae. After giving effect to the settlement agreements with Fannie Mae announced today, the company expects to reduce the range of possible loss above existing accruals for both GSE and non-GSE representations and warranties exposures to up to $4.0 billion at December 31, 2012, compared to up to $6.0 billion at September 30, 2012. " " In addition to the mortgage-related items discussed above, Bank of America expects its fourth-quarter 2012 financial results to be negatively impacted by approximately $2.5 billion (pretax) for the independent foreclosure reviews, litigation (primarily mortgage-related), and other mortgage-related matters. Results for the fourth quarter of 2012 are also expected to include approximately $700 million of pretax negative debit valuation adjustments (DVA) and fair value option (FVO) adjustments related to the continued improvement in the company's credit spreads. In addition to the net tax benefit of the above items, results are also expected to be positively impacted by a benefit of $1.3 billion, primarily related to an income tax benefit from the recognition of foreign tax credits made available from the restructuring of certain non-U.S. subsidiaries. The aforementioned tax effects have no net impact on regulatory capital during the fourth quarter of 2012. Taking into account the effects of all the items above, Bank of America expects earnings per share to be modestly positive for the fourth quarter of 2012. Bank of America is scheduled to report fourth-quarter 2012 financial results on January 17, 2013." Link to comment Share on other sites More sharing options...
Sunrider Posted January 7, 2013 Share Posted January 7, 2013 Eric, We have moved some BAc capital into both AIG and citi...BAC has blown both away in returns...congrats on all of your hard work! Dazel. Hi there When you're looking at Citi - is anyone seriously considering either of their warrants or all common and LEAPS? I've been holding a minute amount of Citi since the depths of the crisis but never really got comfortable with a meaningful valuation estimate (also lack of time on my part). Thanks! Link to comment Share on other sites More sharing options...
enoch01 Posted January 7, 2013 Share Posted January 7, 2013 "These actions are expected to be covered by existing reserves and an additional $2.5 billion (pretax) in representations and warranties provision recorded in the fourth quarter of 2012." So that's more than double the $1 billion excess GSE putback expense they estimated in Q3, right? They still have Freddie to go... I like this less than the market. Link to comment Share on other sites More sharing options...
racemize Posted January 7, 2013 Share Posted January 7, 2013 "These actions are expected to be covered by existing reserves and an additional $2.5 billion (pretax) in representations and warranties provision recorded in the fourth quarter of 2012." So that's more than double the $1 billion excess GSE putback expense they estimated in Q3, right? They still have Freddie to go... I like this less than the market. Their estimate for over the reserved amount dropped by 2 billion though (to 4)--so it seems like the total was 0.5 more than they expected. It is odd that the total dropped 2 when the GSE was only 1 over the 5 for non-GSE, as you mention, though. Maybe some other things changed that gave them the extra billion in reserve drops. Link to comment Share on other sites More sharing options...
MYDemaray Posted January 7, 2013 Share Posted January 7, 2013 They still have Freddie to go.... Freddie was already settled...way early, no? Link to comment Share on other sites More sharing options...
berkshiremystery Posted January 7, 2013 Share Posted January 7, 2013 Otherwise I'm pretty much invested in BAC & AIG,... and still keep my old FFH as this other counterweight, with also some minor positions in LUK & BRK. But seriously, I wouldn't rebalance anything now into a place holder. BAC & AIG are still relative cheap compared with what I expect to receive in future look through earning streams with them. At almost/around half BV something,... ~1% of future ROA stream, yields ~10%ROE, thus almost 20% on something at half BV. I even went into margin a little to juice up my equity in the last year. AIG is the one that I've been thinking about this weekend. BAC has recently run 30% since the Q3 earnings were released and during the same period AIG has actually declined a little bit. Going into the AIG warrants again would accomplish a bit of diversification and that 2021 expiry pushes market risks out much further than 2015 BAC LEAPS. I had the same thoughts in the last days about AIG,.... somehow they are lacking the recent run-up, both common and warrants. But someone should also keep in mind that quarterly earnings could be chilly because of hurricane Sandy expenses. I bought some more AIG warrants some weeks ago, but currently stand on the sidelines. If they would drop slightly, I would definitely increase my position. Link to comment Share on other sites More sharing options...
enoch01 Posted January 7, 2013 Share Posted January 7, 2013 They still have Freddie to go.... Freddie was already settled...way early, no? Duh, you're right - a while back. My bad. Link to comment Share on other sites More sharing options...
racemize Posted January 7, 2013 Share Posted January 7, 2013 So does that mean we are done with the GSE reps and warranties stuff? I thought there were 23 billion in that category and not just the 11 billion mentioned in the Fannie Mae article? Maybe I mis-remembering the category numbers though--I'll look it up after work and post if no one else has it on-hand. Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 7, 2013 Share Posted January 7, 2013 Number of 60+ Day Delinquent Loans Declined to 775,000 at December 31, 2012 From 936,000 at September 30, 2012 MSR Sales Expected to Include 232,000 60+ Day Delinquent Loans I think this is what is moving the market. This is a 17% reduction in 60+ delinquency in 1 qtr. I hope to see substantial reduction in qtry expense. So that MSR sale brings the total down to 543,000. It therefore should take about a year to get it down to the normalized level if they are still reducing their case load at the rate of approximately 300,000 per year (the pace of 2010/2011/2012). Link to comment Share on other sites More sharing options...
bmichaud Posted January 7, 2013 Share Posted January 7, 2013 Now just frickin settle with MBI and be done with these legal shenanigans.... Link to comment Share on other sites More sharing options...
ERICOPOLY Posted January 7, 2013 Share Posted January 7, 2013 Well now I can't sell any for a while. Feeling too good about the pace of things clearing up. Link to comment Share on other sites More sharing options...
DCG Posted January 7, 2013 Share Posted January 7, 2013 For those of you who own January 13 calls, are you planning on exercising them and taking the common or just selling them? Link to comment Share on other sites More sharing options...
PlanMaestro Posted January 7, 2013 Share Posted January 7, 2013 Shouldn't someone start campaigning for Moynihan? Can Brian Moynihan Survive Long Enough to Fix B of A? http://www.americanbanker.com/countdown2013/news/can-brian-moynihan-survive-long-enough-to-fix-bofa-1055510-1.html?zkPrintable=1&nopagination=1 Link to comment Share on other sites More sharing options...
Kraven Posted January 7, 2013 Share Posted January 7, 2013 Now just frickin settle with MBI and be done with these legal shenanigans.... Indeed. I will be curious to see how BAC continues to argue successor liability. Link to comment Share on other sites More sharing options...
MYDemaray Posted January 7, 2013 Share Posted January 7, 2013 PR from Fed's settlement with mortgage servicers (including BAC): http://www.federalreserve.gov/newsevents/press/bcreg/20130107a.htm Link to comment Share on other sites More sharing options...
Parsad Posted January 7, 2013 Share Posted January 7, 2013 Shouldn't someone start campaigning for Moynihan? Can Brian Moynihan Survive Long Enough to Fix B of A? http://www.americanbanker.com/countdown2013/news/can-brian-moynihan-survive-long-enough-to-fix-bofa-1055510-1.html?zkPrintable=1&nopagination=1 I liked this quote by Moynihan that was in the article: Moynihan acknowledged the somewhat absurd balancing act he faces: "We want to be the biggest company we can be to impact our customers; and the smallest, most efficient company we can be for our shareholders and equity," he said at the Goldman Sachs conference. So far, so good! Cheers! Link to comment Share on other sites More sharing options...
PlanMaestro Posted January 7, 2013 Share Posted January 7, 2013 Where is WEB? Wasn't one of the reasons he got the deal he got that it implied him saying wonderful things about Moynihan as he performed? We don't want to lose this guy. Shouldn't someone start campaigning for Moynihan? Can Brian Moynihan Survive Long Enough to Fix B of A? http://www.americanbanker.com/countdown2013/news/can-brian-moynihan-survive-long-enough-to-fix-bofa-1055510-1.html?zkPrintable=1&nopagination=1 I liked this quote by Moynihan that was in the article: Moynihan acknowledged the somewhat absurd balancing act he faces: "We want to be the biggest company we can be to impact our customers; and the smallest, most efficient company we can be for our shareholders and equity," he said at the Goldman Sachs conference. So far, so good! Cheers! Link to comment Share on other sites More sharing options...
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