One cloud over Bank of America (NYSE: BAC) is the extent to which it will face a tsunami of putback requests. It's unclear how private investors will act, but a lot of people expect the likes of PIMCO, Blackrock, various mortgage insurers and perhaps even more Fed banks to file lawsuits.

We're not at all sure how this will play out but as of this moment, the burden seems manageable. Bank of America says it has been hit with $26.7 billion in repurchase requests through the third quarter of 2010--most, we assume, from Fannie and Freddie. The bank has resolved somehow about $18 billion of those claims, and it has set aside reserves of $4.4 billion to cover the remaining $8.7 billion.

In addition, CEO Brian Moynihan has tried to convey that a putback doesn't result in a total loss because there is collateral behind every mortgage, which carries some value. But the issue could linger for years.

"It's going to be like a tobacco or an asbestos situation," analyst Richard Bove tells TheStreet.com, suggesting that the legal battles will continue evolving as plaintiffs test courts to find successful strategies.

Compass Point Research and Trading calculates that Bank of America has the most exposure to putbacks, facing $35 billion in losses, followed by JPMorgan Chase with $23.9 billion in estimated losses. Citigroup ranks eighth. Wells Fargo, despite being one of the major mortgage lenders, isn't even in the top 11.

All of this is still unfolding. The resolution--or not--of the foreclosure fiasco may affect this issue as well. If foreclosures are found to be illegitimate, they could generate additional putback requests.

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