By Zachary Tracer
NEW YORK - Bank of America Corp., the second-biggest U.S. lender by assets, agreed to pay Fannie Mae $3.6 billion to resolve home-loan repurchase claims.
The lender will also pay $6.75 billion to repurchase residential mortgages sold to Fannie Mae, Charlotte, N.C.-based Bank of America said today in a statement. The deal will “substantially resolve outstanding claims for compensatory fees” between the two companies, according to the statement.
Fannie Mae, Freddie Mac and other buyers of mortgages have demanded compensation for loans created by Countrywide Financial Corp., which Bank of America acquired in 2008, claiming the loans were based on flawed data about the properties and borrowers. Losses from Countrywide, the largest U.S. mortgage lender as recently as 2007 before billions of dollars in soured loans prompted its sale to Bank of America, have continued to plague the lender, leading to more than $40 billion in costs.
“These agreements are a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time,” Bank of America Chief Executive Officer Brian Moynihan, 53, said in the statement.
Today’s agreement covers $300 billion in outstanding principal on loans sold to Fannie Mae between 2000 and 2008. The lender also agreed to sell servicing rights on $306 billion in home loans in separate deals.
Bank of America shares advanced 2.1 percent to $12.36 at 7:57 a.m. in New York.
Nationstar Mortgage Holdings Inc. said in a separate statement that it signed an agreement to acquire $215 billion in residential mortgage servicing rights from Bank of America for about $1.3 billion.