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 22,370.80 39.45 0.18%
Nasdaq 6,461.32 6.68 0.10%
S&P 500 2,506.65 2.78 0.11%
Treasuries 2.24 0.01 0.63%
Data as of 5:06pm ET
Company Price Change % Change
Advanced Micro Devic... 13.12 0.04 0.31%
Bank of America Corp... 24.86 0.16 0.65%
AT&T Inc 38.21 0.79 2.11%
General Electric Co 24.20 -0.26 -1.06%
Comcast Corp 37.30 0.19 0.51%
Data as of 4:15pm ET
Sponsors

Sections

Federal Reserve Chair Janet Yellen's term expires in February, and it's unclear whether President Trump will reappoint her for another term or choose someone else. More