BAC Mulls Over Buying $9B Residential Mortgage Loans From TD

Group 1: Bank of America (BAC) Acquisition - Bank of America plans to purchase a $9 billion portfolio of residential mortgage loans from The Toronto-Dominion Bank (TD) [1] - The targeted portfolio consists of jumbo mortgages from U.S. homeowners with high credit scores, indicating a focus on high-quality loans [2] - Jumbo mortgages exceed the size limit of conventional loans and are not eligible for government-supported programs [3] Group 2: Regulatory Environment - The Basel III Endgame regulations, which required banks to hold more capital against residential mortgages, are expected to be eased or abandoned, allowing banks to expand in mortgage lending [4] Group 3: Toronto-Dominion Bank (TD) Restructuring - TD is reducing its U.S. retail assets by approximately 10% to comply with a $434 billion limit set by the Office of the Comptroller of the Currency (OCC) [5] - This restructuring is part of TD's response to a guilty plea for failing to prevent money laundering activities [5] Group 4: Market Performance - Over the past six months, BAC's stock has risen by 22.3%, while TD's stock has increased by 5.1% [6] - BAC currently holds a Zacks Rank 2 (Buy), whereas TD has a Zacks Rank 4 (Sell) [6] Group 5: Industry Comparison - In December 2024, Brookfield Asset Management Ltd. purchased a pool of performing commercial real estate mortgage loans from Valley National Bancorp at a discount [7]