Shares of Bank of American Corp. (NYSE: BAC) are up about 5% today on two bits of news. First there’s the story that the bank is negotiating a sale of its wealth management division to Swiss banker Julius Baer Group.
But the more likely story is that the Federal Housing Finance Authority (FHFA) will help banks avoid demands by Fannie Mae and Freddie Mac to buy back bad mortgages. The FHFA is concerned that banks are tightening lending requirements and failing to make loans to even gold-plated customers. Bloomberg reports that credit score requirements have jumped 100-200 points than minimums set by the FHFA, Fannie, and Freddie ever since the latter two have demanded that banks repay more than $80 billion in flawed loans.
Shares of Citigroup Inc. (NYSE: C) are also up today, about 3.8%, and shares of JPMorgan Chase & Co. (NYSE: JPM) are up about 2.2%, while Wells Fargo & Co. (NYSE: WFC) shares are up 2.1%.
Paul Ausick
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