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

Search for Jobs

Index Last Change % Change
Dow 20,775.60 32.60 0.16%
Nasdaq 5,860.63 -5.32 -0.09%
S&P 500 2,362.82 -2.56 -0.11%
Treasuries 2.42 -0.01 -0.37%
Data as of 7:18am ET
Company Price Change % Change
Bank of America Corp... 24.79 0.01 0.04%
Chesapeake Energy Co... 5.92 -0.16 -2.63%
Freeport-McMoRan Inc... 13.73 -0.40 -2.83%
General Electric Co 30.09 0.24 0.80%
Intel Corp 36.07 -0.45 -1.23%
Data as of Feb 22
Sponsors

Sections

Powerball jackpot tops $400 million, as change in the game to create longer odds against winning allows for more frequent big prizes. More

Trump supporters say they found deductibles and out-of-pocket costs under Obamacare to be unaffordable, according to a new Kaiser survey. More

Tesla said Wednesday it expects to 'finalize locations' this year for as many as three new Gigafactory locations. More

America's three biggest banks -- JPMorgan Chase, Bank of America and Wells Fargo -- earned over $6.4 billion last year from ATM and overdraft fees, according to an analysis by CNNMoney. More