FHFA announces $9.3 billion settlement with Bank of America

This story appeared in Bank Digest.

The Federal Housing Finance Agency, as conservator of Fannie Mae and Freddie Mac, announced that it has reached a settlement in cases involving Bank of America, Countrywide Financial, Merrill Lynch, and certain named individuals totaling approximately $5.83 billion. Bank of America Corporation owns Countrywide and Merrill Lynch. The cases alleged violations of federal and state securities laws in connection with private-label, residential mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac between 2005 and 2007. Allegations of common law fraud were made in the Countrywide and Merrill Lynch cases. The agreement provides for an aggregate payment of approximately $9.33 billion by Bank of America that includes the litigation resolution as well as a purchase of securities by Bank of America from Fannie Mae and Freddie Mac.