Bank of America Corp. (NYSE:BAC) and Wells Fargo & Co. (NYSE:WFC), the largest U.S. mortgage firms, said they may face fines or enforcement actions from regulators amid investigations into foreclosure procedures.
The probes may also lead to “significant legal costs,” Charlotte, North Carolina-based Bank of America said yesterday in its annual report to the Securities and Exchange Commission. Wells Fargo, based in San Francisco, said in its filing that penalties are likely.
“I’m sure the banks are ready to put this past them and investors would certainly like to but this is not an issue that is going to go away,” Blake Howells, an analyst at Becker Capital Management Inc. in Portland, Oregon, said in an interview. “There will be more lawsuits that come down the road.” Becker Capital oversees $2.4 billion.
The largest U.S. banks have been trying to reassure investors that costs from faulty foreclosure documents are manageable. Wells Fargo said yesterday it didn’t expect litigation costs to have a “material adverse” impact on its financial position. Bank of America said it faced $230 million in fees from slowed foreclosures.
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