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BofA Settles Mortgage Bond Lawsuits For $8.5 Billion

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Bank of America has agreed to pay $8.5 billion to settle claims regarding refunds demanded by mortgage bondholders, including BlackRock Inc., and Pacific Investment Management Co., and the Federal Reserve Bank of New York.

In the lawsuit, the investors demanded that BofA repurchase home loans that had been packaged into the bonds by Countrywide Financial Corp, which BofA owns. Nearly 530 mortgages are involved in the suit, totaling $424 billion, Bloomberg reports.

The settlement follows a $3 billion settlement regarding similar claims involving Fannie Mae and Freddie Mac, and a $1.6 billion settlement with bond insurer Assured Guaranty Ltd.

According to Bloomberg, Bank of America also said it is adding $5.5 billion to a liability reserve fund for future claims and recording $6.4 billion in charges including legal costs and a writedown of mortgage-unit goodwill.

Biz Journal reported that because of the settlement and other mortgage related issues, BofA expects to report a net loss “n the range of $8.6 billion to $9.1 billion, or 88 cents to 93 cents per diluted share, in the second quarter of 2011.”

 

 

breakinglawsuitnews.com disclaimer: This article: BofA Settles Mortgage Bond Lawsuits For $8.5 Billion was posted on Wednesday, June 29th, 2011 at 3:52 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

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