BOA to pay $9.3bn to settle government claims

by Ryan Smith27 Mar 2014
Bank of America will pony up about $9.33 billion to settle various lawsuits filed by the Federal Housing Finance Agency.

The FHFA announced Wednesday that it had reached an agreement in cases involving Bank of America and its Countrywide Financial and Merrill Lynch units. The cases involved alleged violations of federal and state laws in the sale of residential mortgage-backed securities to Fannie Mae and Freddie Mac between 2005 and 2007.

Under the agreement, Bank of America will pay a total of about $9.33 billion, which includes litigation resolution and the repurchase of securities from Fannie and Freddie.

“FHFA has acted under its statutory mandate to recover losses incurred by the companies and American taxpayers and has concluded that this resolution represents a reasonable and prudent settlement of these cases,” said FHFA director Mel Watt. “This settlement also represents an important step in helping restore stability to our broader mortgage market and moving to bring back the role of private firms in providing mortgage credit. Many potential homeowners will benefit from increasing certainty in the marketplace and that is very much the direction we should be taking.”

The lawsuits were among several filed by the FHFA in 2011 over the sale of mortgage-backed securities. Of the 18 lawsuits originally filed against various banks, the FHFA has claims still outstanding in seven.


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