The bottom-line impact of the ballyhooed $25 billion settlement between five big mortgage banks and nearly all states will likely be limited.

Bank of America will contribute the majority of the settlement, $11.8 billion, mainly by dint of its Countrywide purchase. Wells Fargo will provide $5.4 billion, JPMorgan $5.3 billion,  Citigroup $2.2 billion and Ally will provide $310 million. Bank of America will be required to pay an additional $1 billion for F.H.A. loans.

According to Forbes, analysts are calling this a net positive because these required contributions have already been reserved against and because the settlement represents the dissolution of another cloud of uncertainty hanging over the group. Still, few think this is a major milestone. The fact remains that a lot of litigation risk related to mortgages endures.

As if to underscore the point, MBIA has appealed a judge’s ruling in a widely watched putback case in hopes that the tactical move would result in Bank of America being forced to own up to a much larger class of bonds in which misrepresentation is alleged.

Piercing the legalese, one analyst says the ruling puts the “worst case” scenario for Bank of America right back on the table, notes TheStreet.com. The legal skirmishing will continue, but the MBIA case serves as a reminder, as does the on-going GSE skirmishing, that plenty of legal uncertainties still exist.          

For more:
- here’s the Forbes article

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