if what reported by WSJ is true. The main impact looks like will be civil
ligation.
don't know how much BAC set aside for the lawsuite. But the potential
costs for representations and warranties could be much lower that some
estimation. It will be tough for investors or monoline insurers to win their
repurchase requests since they need prove the breach is materials.
The requests from those GSE will be the key, i believe at least half of
request come from them based on the size of their holding.The market
turbulence will be bad for fannie and Freddie.
Let's see what market's reaction tomorrow since my view is bias since I hold
some Dec 10 BAC call at 13 :-).
