The housing bust is still haunting Bank of America.
One of the nation’s biggest banks, whose shares are enjoying a resurgence since hitting a low in May, has disclosed an investigation into its mortgage practices by New York Attorney General Eric Schneiderman.
BofA said the investigation, revealed in public filings late Thursday, could ding it for as much as $3.1 billion in penalties.
The news pushed BoFA shares lower at the opening — but they recovered to close up 1 percent at $11.34. They are up 40.1 percent over the last year — the best among its peers.
The Charlotte, NC-based bank, run by CEO Brian Moynihan, has already shelled out about $47 billion in fines and settlements related, in part, to its ill-fated 2008 acquisition of Countrywide Financial that saddled it with billions in toxic home loans.
As part of President Obama’s working group to help investigate the causes of the housing bust, Schneiderman is probing how BofA originated and packaged home loans for sale to investors.
BofA has stated that it is cooperating with the AG’s probe. A BofA spokesman declined to comment beyond the public filings.
A spokesman for Schneiderman also declined to comment.
Lately, forking over hefty fines has become the new operating norm for Moynihan, who has been attempting to fix a mess of costly mergers engineered by former CEO Ken Lewis.
Just last month, BofA agreed to pay roughly $13 billion in settlements, including an $11.7 billion payment to government-backed mortgage giant Fannie Mae.
Despite the money-draining settlements, shareholders have been growing more optimistic about the bank’s ability to put the past behind it.
Since May, when shares hit $6.83, prompting sage investor Warren Buffett to toss it a $5 billion lifeline, BofA has recovered about 66 percent to $11.34.