NEW YORK (TheStreet) -- Bank of America (BAC) will have additional time to negotiate in a dispute with a large bondholder group over about $47 billion in soured mortgage backed securities (MBS), the bank indicated in a press release Wednesday afternoon.
Attorneys representing the bondholders, which include Pacific Investment Management Co., BlackRock (BLK), and the New York Federal Reserve wrote a letter to Bank of America and Bank of New York Mellon (BK), the trustee on the MBS, saying the loans in the MBS were not properly serviced by Countrywide, and should bew put back to Bank of America, which acquired Countrywide in 2008.
The letter argued the issues should be fixed in 60 days or Countrywide should be declared in default on its obligations.
But the press release Wednesday stated that both parties had agreed to "extend any time periods commenced by the Oct. 18 letter," adding "this extension will permit the parties to continue constructive dialogue around the concerns raised."The dispute is one of many Bank of America and other MBS underwriters, including Goldman Sachs (GS), Morgan Stanley (MS), Citigroup (C) and several European banks are expected to contend with in the coming months and possibly years. Some analysts estimate for those institutions run well over $100 billion, though Bank of America is widely thought to have the greatest exposure to MBS putbacks. -- Written by Dan Freed in New York.
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