NEW YORK — Bank of America Corp. will take a massive blow of more than $20 billion in the second quarter for various mortgage-related costs, including $14 billion the bank will put aside to repurchase soured mortgage loans from investors.
The costs show the continuing impact on the nation’s biggest bank from the housing crisis and its purchase of home lender Countrywide Financial.
The bank will pay $8.5 billion to settle claims brought by a group of high-profile investors, including BlackRock Inc., MetLife Inc. and Pacific Investment Management Co., or Pimco, which purchased mortgage-backed securities that subsequently went sour.
Separately, the bank said it was taking a further $5.5 billion second-quarter provision tied to its exposure to government-run mortgage giants Fannie Mae and Freddie Mac as well as other private investors.
The bank also expects to record $6.4 billion in other mortgage-related charges in the period, including $2.6 billion to write off the balance of goodwill in the consumer- real-estate-services business and roughly $4 billion that includes litigation costs and other write-downs related to servicing and foreclosure costs.
And despite the $14 billion the bank is setting aside for repurchase claims — bringing its total losses on mortgage putbacks to $22 billion since the start of 2010 — it also said there remained a chance that losses from private investors could top its quarter-end accruals by another $5 billion.
The bank said it expects the mortgage-related costs to drag the company to a loss of $8.6 billion to $9.1 billion in the second quarter, or a loss of 88 cents to 93 cents per share.
