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Bank of America has settled a dispute with the US government-sponsored mortgage finance companies Fannie Mae and Freddie Mac.
It will pay the equivalent of around two billion euros to settle claims that it sold on home loans that stood little chance of ever being repaid.
The agreement with Fannie Mae and Freddie Mac resolves the bulk of the bank’s exposure to them.
The claims arise from mortgages sold by Countrywide, a mortgage company bought by Bank of America in 2008.
The bank, which is the largest mortgage servicer in the United States, has also bought back eight and a half billion euro in mortgages from Fannie Mae and Freddie Mac with billions more to follow.
Previously Bank of America had vowed to fight such claims, but last month appeared to change its stance and started negotiating with a group of mortgage investors.
More about: Bank of America, Banking, EconomyCopyright © 2012 euronews
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