Bank of America Corp. said on Monday that it has reached agreements with Fannie Mae to settle all repurchase and certain other claims surrounding almost all of the mortgage loans originated by Countrywide Financial Corp and Bank of America National Association from 2000 through 2008
Bank of America said as part of the deal it will pay Fannie Mae $3.6 billion
Bank of America also said that it will pay Fannie $6.75 billion to repurchase, "certain residential mortgage loans sold to Fannie Mae, which Bank of America has valued at less than the purchase price.
" The bank added that it expects to cover settlement costs from existing reserves, plus an additional $2.5 billion, pretax charge taken in the 2012 fourth quarter
Bank of America will also report a fourth-quarter 2012 pretax charge to partially fund an agreement to pay Fannie Mae to settle substantially all of Fannie Mae's outstanding and future claims for compensatory fees arising out of past foreclosure delays
"Together, these actions described above are expected to reduce Bank of America's pretax income by approximately $2.7 billion in the fourth quarter of 2012," the company said
After laying out the costs associated with the settlement, as well as some other items, Bank of America said it expects "earnings per share to be modestly positive for the fourth quarter of 2012."
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WASHINGTON (MarketWatch) - Federal regulators on Monday reached an $8.5 billion settlement with ten large financial institutions over foreclosure abuses. The settlement includes $3.3 billion in cash payments to borrowers who went through problematic foreclosures. An additional $5.2 billion will be distributed to homeowners in danger of losing their homes to foreclosure. The banks include Bank of America , Citigroup , Wells Fargo and J.P. Morgan Chase & Co. The Federal Reserve and Office of the Comptroller of the Currency are still in discussions with four other financial institutions including HSBC
The settlement comes roughly a year after state and federal government officials in February, 2011 agreed to a record housing settlement of more than $26 billion with five of the country's biggest banks over foreclosure abuses
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