Blackrock's Fink: bank repurchase concerns overdone

NEW YORK (Reuters) - Banks might have to buy back bad loans they packaged into mortgages, but the impact will not be as significant as some investors fear, the head of the world's largest asset manager said on Wednesday.

Larry Fink, chief executive of BlackRock Inc (BLK.N), said the selling of bank stocks this week is "overdone," as investors fret Bank of America Corp (BAC.N) and other big banks might have to buy back billions of dollars of bad mortgage loans from investors.

"It's not as significant for the banks as some of the players believe," Fink said, saying only that BlackRock would pursue its fiduciary duty in minimizing losses on assets.

BlackRock is part of a group of investors demanding the repurchases of loans in more than $47 billion of mortgage bonds, according to a document sent by Gibbs & Bruns, a Houston-based law firm representing investors.

The group said many of the loans packaged into bonds should never have been sold to investors in the first place.

As of March 31, 2010, Bank of America owned about 3.6 percent of BlackRock's voting common stock and 33.8 percent of BlackRock's total capital stock outstanding, a regulatory filing shows.

(Reporting by Al Yoon; editing by Andre Grenon)