Bank of America to Pay More Than $10 Billion to Fannie Mae

The agreement settles disputes over troubled mortgages.

Posted: 01/07/2013 02:01 PM EST
Bank of America to Pay More Than $10 Billion to Fannie Mae

Bank of America agreed Monday to pay roughly $10 billion to Fannie Mae in a settlement involving troubled mortgages issued by the bank’s Countrywide Financial unit.

Under the terms of the recent agreement, Bank of America said it will pay the housing finance giant $3.6 billion and will also spend $6.75 billion to buy back mortgages from Fannie Mae at a discount to their original value. All of the lender’s disputes with Fannie Mae would be resolved. The bank settled its fight with Freddie Mac, the other government-owned mortgage finance giant, in 2011.

“Together, these agreements are a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time,” Brian Moynihan, Bank of America’s chief executive, said in a statement.

Countrywide is the same subsidiary that agreed to pay $335 million to settle allegations that its financial unit discriminated against qualified Black and Hispanic borrowers between 2004 and 2008.

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(Photo: AP Photo/Charles Krupa)

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