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Bank of America reaches $11.6 billion settlement with Fannie Mae over mortgage sales

Jan 08 2013 Rick Rothacker, Reuters

Bank of America Corp on Monday entered an $11.6 billion settlement to end Fannie Mae's claims that the bank improperly sold it mortgages that later soured, and to resolve problems with foreclosures, the companies said. The settlement is a major step for Bank of America toward resolving claims from investors who want the bank to buy back loans that its Countrywide Financial subsidiary sold to them during the housing boom, many of which later went bad. The agreement largely covers the $11.2 billion of claims that government-owned finance company Fannie Mae had against the bank, which represented about 44 percent of the bank's total pending claims at the end of the third quarter. Bank of America, which bought Countrywide in 2008, still needs court approval for an $8.5 billion settlement with private investors and is locked in litigation with insurer MBIA Inc MBI.N over mortgage-related claims. The settlements, other charges, and a series of asset sales the bank also announced

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