BofA faces $10B mortgage settlement bill

Jan 07, 2013, 10:23 AM EST
Bank of America Corp. Chief Executive Officer Brian Moynihan seen in Charlotte, North Carolina in this December 19, 2011, file p
REUTERS/Chris Keane/Files

Bank of America Corp said it will pay $3.6 billion to Fannie Mae to settle claims related to residential mortgage loans for the nine years to the end of 2008. In addition the bank will repurchase from the government agency $6.75 billion of residential mortgage loans, many originated by Countrywide, the lender acquired by BofA in 2008. "Together, these agreements are a significant step in resolving our remaining legacy mortgage issues," Chief Executive Brian Moynihan said. BofA, the U.S.'s second largest bank by assets, says the settlement to the protracted legal battle will reduce its fourth-quarter pretax income by about $2.7 billion.