A group of investors holding over $84 billion in debt are seeking reimbursements from the Bank of America over home loan securities that have gone sour. More investors have joined the group, pushing the amount of debt holdings from $46 billion in October, to the current $84 billion.
Bank of America have indicated that the number of mortgage deals in dispute has grown from 115 in October to 225 currently. Some of the most powerful firms in the country are embroiled in the dispute, including Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York.
However BofA are questioning the validity of the claims, and wether the investors are even qualified to make such claims. A spokesman for Bank of America Jerry Dubrowski commented:
The amount of unpaid principal balance doesn’t reflect what ultimately might be paid if, in fact, there were valid claims. At this point we have a number of questions about the validity of the assertions, including whether the investors are qualified to bring claims.
The Bank of America and the investor group are continuing negotiations.