Monday, 7 January 2013

Bank of America reaches settlement with Fannie Mae

CHARLOTTE, N.C. (AP) ? Bank of America has reached a settlement with Fannie Mae on residential mortgage loans sold by the bank and its Countrywide unit to the agency ahead of the nation's 2008 financial crisis.

The settlement includes a $3.6 billion payment to Fannie Mae. Bank of America will also buy back some of the loans sold to Fannie Mae for $6.75 billion.

Its stock gained more than 2 percent in premarket trading.

Bank of America bought Countrywide Financial Corp. in July 2008, just before the financial crisis. Countrywide was a giant in mortgage lending, but was also known for approving risky loans.

Bank of America Corp. also said Monday that it is also selling mortgage servicing rights on about 2 million loans.

The bank will take some charges, but expects "modestly positive" fourth-quarter earnings.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/3d281c11a96b4ad082fe88aa0db04305/Article_2013-01-07-Bank%20of%20America-Fannie%20Mae/id-4cd0564feff34722a21932dd268a7dd0

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