Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Bank of America in $3 billion mortgage settlement

bank_of_america.gi.top.jpg By Aaron Smith, staff writer

NEW YORK (CNNMoney) -- Bank of America has reached a $3 billion agreement with Freddie Mac and Fannie Mae to resolve a faulty mortgage loan dispute involving Countrywide Financial Corp.

Bank of America (BAC, Fortune 500) said that it paid nearly $1.3 billion to Freddie Mac and more than $1.3 billion to Fannie Mae on Dec. 31.

The purpose of this agreement is to settle an issue of bad mortgages sold by Countrywide to Fannie Mae and Freddie Mac related to the housing crisis of 2008.

The $2.6 billion worth of payments to Freddie and Fannie, combined with potential losses on future repurchases from government-sponsored enterprises, adds up to $3 billion in expenses, according to BofA.

A Bank of America spokesman also said it expects to take an additional $2 billion charge to fourth-quarter results from the decline in the mortgage business, bringing the total impact to the company to $5 billion.

"Our goals remain the same: put these issues behind us; focus on serving customers and clients; and continue to help distressed homeowners facing difficult times," said Bank of America Chief Executive Brian Moynihan. To top of page

Index Last Change % Change
Dow 21,938.14 -86.73 -0.39%
Nasdaq 6,315.69 -29.42 -0.46%
S&P 500 2,459.67 -8.44 -0.34%
Treasuries 2.24 0.01 0.54%
Data as of 10:08am ET
Company Price Change % Change
Advanced Micro Devic... 12.62 -0.02 -0.12%
Cisco Systems Inc 31.30 -1.04 -3.22%
Bank of America Corp... 24.14 -0.05 -0.21%
L Brands Inc 36.17 -2.78 -7.14%
Wal-Mart Stores Inc 79.04 -1.94 -2.40%
Data as of 9:53am ET


The Congressional Budget Office narrows its projection for when Treasury will run short on money if Congress doesn't raise or suspend the country's debt ceiling. More

Apple is donating $2 million to groups "working to rid our country of hate," CEO Tim Cook said in an email to employees. More

A hundred years ago, women in the workplace looked a little different than they do now. But many of the basic tenets of how to dress for an office job remain true today. More