B of A in 'Constructive Dialogue' With Mortgage-Security Investors

Bank of America Corp.'s hard-line stance on mortgage investor claims just got a bit more nuanced.

In a statement late Wednesday, the company announced that it was engaged in "constructive dialogue" with the mortgage security investors who issued an October 18 letter alleging that it had failed to fulfill its obligations as a mortgage servicer.

The notice, issued shortly before the 60-day deadline initially set for the company and trustee Bank of New York Mellon to respond, contrasts with the company's earlier dismissal of investor complaints. Shortly after the letter was first sent, B of A Chief Executive Officer Brian Moynihan announced that the bank would respond to investor repurchase attempts with "hand to hand combat" over individual loan files. The comments seemed to preclude any possibility of a wholesale level redress of investor grievances, which range from a failure to repurchase ineligible loans to waste and self-dealing in the bank's servicing procedures.

"If you think about people who come back and say, I bought a Chevy Vega, but I want it to be a Mercedes with a 12-cylinder, we're not putting up with that," he said on the company's third quarter earnings call.

Moynihan has since adopted a more subdued tone.

"At the end of the day, we'll pay for the things that Countrywide did," he said last month, referencing the behemoth mortgage servicer that B of A acquired in 2008.

According to B of A's statement on Wednesday, "the claims and defenses of all parties are preserved."

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