apparently the willingness of creditors holding $16 billion of
questionable mortgage backed securities agreed to continue to
negotiate, and that is viewed as a good sign for the company.
unfortunately for BAC the creditors want to be paid 100 cents on
the dollar for these mortgages priced ~33 cents (I think)
currently. their contention is the mortgages should never have been
pooled in the first place as they didn't meet the criteria of the
pools (not sure if SEC registered or not) they were gathered into.
my understanding is there is another 25+ billion of BAC mortgages
out there with similar problems. bottom line, is eventually
BAC is going to have to take these mortgages back and write off the
difference. by continuing negotiations they won't have to do that
in the fiscal period ending 12/31/10. imho they will have to do it
in 2011, the question will be how much they can 'negotiate' the
damage down. I'd be reluctant to hold BAC as a long term prospect.
JMHO.
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BAC
Posted by ditch on 16th of Dec 2010 at 09:19 am
Although it got a cut in ratings this AM it's trading up $.22 and is breaking out of a bull flag. It has already traded 4 million shares+ BAC
BAC
Posted by hazbin1 on 16th of Dec 2010 at 09:26 am
apparently the willingness of creditors holding $16 billion of questionable mortgage backed securities agreed to continue to negotiate, and that is viewed as a good sign for the company. unfortunately for BAC the creditors want to be paid 100 cents on the dollar for these mortgages priced ~33 cents (I think) currently. their contention is the mortgages should never have been pooled in the first place as they didn't meet the criteria of the pools (not sure if SEC registered or not) they were gathered into. my understanding is there is another 25+ billion of BAC mortgages out there with similar problems. bottom line, is eventually BAC is going to have to take these mortgages back and write off the difference. by continuing negotiations they won't have to do that in the fiscal period ending 12/31/10. imho they will have to do it in 2011, the question will be how much they can 'negotiate' the damage down. I'd be reluctant to hold BAC as a long term prospect. JMHO.