All data is delayed
See More

Bank of America in $3.6bn mortgage deal

Jan 07 2013 16:53
New York - Bank of America said it will pay $3.6bn to Fannie Mae to settle claims related to residential mortgage loans for the nine years to the end of 2008.

The bank also entered into agreements with Nationstar Mortgage Holdings and Walter Investment Management to sell about $306bn of residential mortgage servicing rights. 

The rights allow banks to earn fees from mortgage investors in exchange for collecting home loan payments from borrowers.

As part of the settlement with Fannie Mae, the bank will repurchase $6.75bn of residential mortgage loans sold to the government agency.

BofA said the settlement will reduce its fourth-quarter pretax income by about $2.7bn.

Reuters reported on Friday that the bank was in talks to sell collection rights on $300bn of mortgages to lessen its exposure to huge losses from its acquisition of Countrywide Financial Corporation in 2008. 

"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," Chief Executive Brian Moynihan said in a statement.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.



Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


With infrastructure spending having been identified as one of the key focus areas of the National Development Plan, tradesmen will continue to play a critical role in growing the South African economy through their skills..

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

A 30% a month return on investment is:

Previous results · Suggest a vote