NEW YORK ( TheStreet) -- Justice delayed sucks, if you think you got away with it.
Wells Fargo (WFC), which dominates the mortgage market and has sometimes taken one-third of it, must have figured it was past the market's problems after signing off on the $25 billion national industry settlement in 2011, dealing with charges against mortgage holders during and right after the Great Recession.
But ambitious New York Attorney General Eric Schneiderman wants the bank back in court, claiming it didn't meet obligations under the settlement, which included loan modifications, principal reductions and short sales.
(BAC), had its New York suit dropped after promising to do better. Wells Fargo disputes the new charges. While Bank of America came out of the 2008 crash with low-grade assets like Merrill Lynch and Countrywide Financial, Wells Fargo was able to pick off Bank of America's healthier North Carolina rival, Wachovia, for a market price of $14.8 billion. Bank of America had tried to buy Wachovia for $2.1 billion, a good bank to make up for the bad banks it was taking. History has shown Wells Fargo did some smart business there. Wachovia gave it a nationwide reach and put it into the money center major leagues. Thus, among all the largest banks, Wells Fargo is the only one that has generally traded at a substantial premium to its book value since the crash. It currently trades at about 1.47 times book, which is more than double the ratio of Bank of America, still struggling to hold .70. ( JPMorgan Chase (JPM) and Goldman Sachs (GS) trade at about their book value; Citigroup (C) at .77 times book.) I like to call book value the "Mendoza Line" of banking, because it's a barely acceptable figure, like the Pirate shortstop Mario Mendoza, who hit .200 yet stayed in the show for a decade. (Go Pirates.)
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV