|Associated Press/Charles Krupa - |
In this Dec. 13, 2012 photo, a customer
stops at a Bank of America ATM office in Boston.
Bank of America in $10B-plus mortgage settlement
Associated Press – 2 hrs 52 mins ago
Bank of America Corp. says it will spend more than $10 billion to settle mortgage claims …more
CHARLOTTE, N.C. (AP) — Bank of America says it will spend more than $10 billion to settle mortgage claims resulting from the housing meltdown.
Under the deal announced Monday, the bank will pay $3.6 billion to Fannie Mae and buy back $6.75 billion in loans that the North Carolina-based bank and its Countrywide banking unit sold to the government agency from Jan. 1, 2000 through Dec. 31, 2008. That includes about 30,000 loans.
Its shares briefly edged up 9 cents to $12.20 in morning trading, its highest level since May 2011.
CEO Brian Moynihan said the agreements were "a significant step" in resolving the bank's remaining legacy mortgage issues while streamlining the company and reducing future expenses.
Bank of America bought Countrywide Financial Corp. in July 2008, just before the financial crisis. Countrywide was a giant in mortgage lending, but was also known for approving risky loans.
Fannie Mae and Freddie Mac, which packaged loans into securities and sold them to investors, were effectively nationalized in 2008 when they nearly collapsed under the weight of their mortgage losses.
Bank of America's purchase of Countrywide originally was lauded by lawmakers because the bank was viewed as stepping in to eliminate a bad actor from the mortgage market. But instead of padding Bank of America's mortgage business, the purchase has drawn a drumbeat of regulatory fines, lawsuits and losses.