Bank of America agrees to pay $3.6 billion to Fannie Mae

Nathan Andrada – Fourth Estate Cooperative Contributor

New York, United States (4E) – Bank of America Corp. announced that it has agreed to pay $3.6bn to Fannie Mae as it seeks to resolve the home-loan repurchase claims from Countrywide Financial Corp and Bank of America National Association between 2000 and 2008.

The second-largest lender in the U.S. in terms of assets also decided to pay Fannie Mae $6.75bn to repurchase residential mortgages sold to Fannie Mae, according to the statement released Tuesday. Bank of America said that the agreement will resolve outstanding claims for compensatory between the Fannie Mae and the Charlotte, North Carolina-based bank.

The bank expects that after indicating the costs of the settlement, as well as other things, it will likely see “earnings per share to improve in the final quarter of 2012.”

Bank of America plans to cover settlement costs using its existing reserves, and report a pretax charge of $2.5bn in the September-December quarter. The company said that the move will likely lower Bank of America’s pretax earnings by around $2.7bn.

Several mortgage buyers including Fannie Mae and Freddie Mac have asked compensation for loans originated by Countrywide Financial Corp., which Bank of America bought in 2008, alleging that the loans used false data about the borrowers and properties.

Article © AHN – All Rights Reserved
About the Author

Leave a Reply