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Buffett says BofA needs time to clean itself up

The financial oracle has skin in the BofA game to the tune of $5 billion

Warren Buffett spoke to the press today regarding much-maligned Bank of America (BofA), which has been on the receiving end of a litany of lawsuits, bad press and simply seems to have a black cloud firmly entrenched above its proverbial head.

Buffett told Bloomberg Television earlier this morning that the bank’s problems will take “much longer” to resolve. “The bank has a wonderful underlying business—it’s got lots of problems,” he told Bloomberg. His company, Berkshire Hathaway Inc., invested $5 billion in BofA.

BofA’s problems are manifold these days. Last week news broke that the beleaguered bank could face new litigation over its mortgage registration system. The Federal Housing Finance Agency is suing BofA, and a handful of others, alleging that they misrepresented mortgage securities sold during the housing bubble. The bank also is under siege from another company that has experienced its own PR nightmare in recent years. American International Group Inc. filed suit over the same mortgage misrepresentation issues as the others and is seeking $10 billion in damages.

Despite the seemingly bleak situation, Buffett seems confident that BofA can weather the storm.

“The bet is,” Buffett said in the interview, “is Brian (Moynihan, BofA’s CEO) going to get rid of those problems? It won’t take six months or a year; it will take much longer than that even. But the underlying business is doing fine.”

For more, read Bloomberg.

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