Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Housing News

Bank of America, Freddie Mac reach $404M mortgage settlement

Bank of America will shell out $404 million to settle their final claim between the big bank and Freddie Mac and Fannie Mae, covering losses dating back to 2000.

bank of america

bank of america

Bank of America, Freddie Mac reach an agreement

Bank of America has reached a $404 million mortgage repurchase agreement with Freddie Mac on Monday morning, which covers outstanding as well as potential residential mortgage claims through the end of 2009 and will make-whole claims tied to loans sold to Freddie Mac between January 1, 2000 and December 31, 2009.

Additionally, the settlement outlines that Bank of America will compensate Freddie Mac for specific past loan losses and potential future losses tied to denials, rescissions, as well as cancellations of mortgage insurance.

This settlement agreement is another in the long line of agreements between banks and Fannie/Freddie surrounding loans that were illegal, fraudulent, or contained faulty origination documents, a substantial portion of which surrounds the robosignature debacle that poisoned the entire chain of title.

This closes a major chapter in BoA history

So will this hurt Bank of America? Of course not, and not because $404M is a drop in the bucket, but because this settlement is fully covered by existing legal reserves. In a statement, Bank of America notes this settlement resolves their outstanding issues between them and Fannie Mae and Freddie Mac, also covering their liabilities for Countrywide which they acquired in 2008. This was the primary point made in their short statement, focusing on the resolution of “all outstanding and potential representations and warranties claims on whole loans sold by legacy Bank of America and Countrywide to Fannie Mae and Freddie Mac.”

Advertisement. Scroll to continue reading.

“We are pleased to have reached this agreement with Bank of America, which now allows both companies to move forward,” Freddie Mac CEO Donald Layton said in a statement. “We continue to make very good progress in recovering funds that are due to the American taxpayer, as well as resolving Freddie Mac’s legacy repurchase issues.”

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.



Housing News

(Mortgage) Despite his role in the most colossal mortgage company failures in history, the mysteriously orange Mozilo claims the world wants to punish him...

Business Finance

(Business Finance) Bank of America has seen the fallout from bad choices leading up to the economic crash, and one executive is facing the...

Housing News

(Housing News) Fannie Mae is offering incentives on foreclosures, and while many homeowners are unaware, many agents are as well - time to take...

Housing News

(Housing News) Once thought an impossibility, the controversial Mel Watt has been confirmed as the next head of the FHFA, which some say is...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.