Bank of America did manage to cut the costs that were expected in its first quarter, but surprised investors with yet one more large payout to bond holders suing over mortgage securities, the Wall Street Journal reported today. The nation’s second-largest bank by assets said that it would pay $500 million to release it from claims on mortgage bonds that carry a current principal of $95 billion. Countrywide had been sued by several pension funds involved in the case way back in November 2007, a case that later added other pension firms including the Maine State Retirement System in January 2010. The Maine filing had attracted some attention as it sought a massive payday over $352 billion in loans originated. But a court had rejected many of the claims and reduced the suit. The $500 million settlement helped keep BofA’s overall litigation expense at $881 million for the quarter, up from $793 million a year ago and only down slightly from $916 million in the fourth quarter.
