Bank of America Settles Loan Repurchase Requests with Fannie, Freddie

January 3, 2011 No Comments »

bank of america

Bank of America announced today that it reached loan repurchase agreements with both Fannie Mae and Freddie Mac concerning certain legacy Countrywide mortgages.

The Charlotte-based bank and mortgage lender agreed to pay the pair roughly $1.3 billion each to settle any alleged breaches of selling representations and warranties related to the loans.

However, the agreements do not cover loan servicing obligations or loans contained in private label securitizations.

“These actions resolve substantial legacy issues in the best interest of our shareholders,” said Bank of America President and Chief Executive Officer Brian Moynihan, in a release.

“Our goals remain the same: put these issues behind us; focus on serving customers and clients; and continue to help distressed homeowners facing difficult times.”

Bank of America has taken a number of steps to clear up the damages caused by former top mortgage lender Countrywide, which it acquired back in early 2008.

The company has discontinued the infamous option arm and other subprime mortgages, while launching a streamlined loan modification program that has resulted in more than 750,000 loan workouts since the beginning of 2008.

However, the lawsuits seem to be endless, with Allstate the latest to claim Countrywide sold the insurer faulty mortgage securities.

Looks like the ghost of Countrywide still has some life to it, but perhaps another Countrywide bankruptcy won’t be necessary after all.

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