Bank Of America To Pay $3.6 Billion To Settle Mortgage Claims - Spokane, North Idaho News & Weather KHQ.com

Bank Of America To Pay $3.6 Billion To Settle Mortgage Claims

Posted: Updated:

(Reuters) - Bank of America on Monday announced roughly $11.6 billion of settlements with mortgage finance company Fannie Mae and a $1.8 billion sale of collection rights on home loans, in a series of deals meant to help the bank move past its disastrous 2008 purchase of Countrywide Financial Corp.

The settlements and transactions and other charges will result in Bank of America posting only a small profit for 2012's fourth quarter. The bank is due to report results on January 17.

Bank of America is paying $3.6 billion to Fannie Mae and buying back $6.75 billion of bad loans from the mortgage company to clear up all claims that government-owned Fannie Mae had made against the bank.

Fannie Mae and its sibling, Freddie Mac, have been pushing banks to buy back loans they sold to the two companies that never should have been sold to them because the loans did not meet the companies' criteria for purchasing.

Bank of America said most of the settlement would be covered by reserves, and another $2.5 billion, before taxes, that it set aside in the fourth quarter.

A separate settlement over foreclosure delays will result in Bank of America paying $1.3 billion to Fannie Mae, the mortgage company said. Bank of America had already set aside money to cover most of that, but took another $260 million charge in the fourth quarter to cover the balance.

Bank of America also sold the rights to collect payments on about $306 billion of loans to Nationstar Mortgage Holdings and Walter Investment Management Corp. Nationstar is paying $1.3 billion for the right to service some $215 billion of loans, while Walter Investment is paying $519 million for the right to service about $93 billion of mortgages.

Reuters first reported that Bank of America was talking to Nationstar and Walter Investment on Friday.

(Reporting by Tanya Agrawal in Bangalore and David Henry in New York.; Editing by Dan Wilchins and Maureen Bavdek)

  • Most Popular StoriesMost Popular StoriesMore>>

  • Priest Lake Auction: Saying goodbye to home

    Priest Lake Auction: Saying goodbye to home

    Wednesday, August 27 2014 10:50 PM EDT2014-08-28 02:50:23 GMT
    PRIEST LAKE, Idaho - After years of obstacles for 61 Priest Lake lot lessees, the end comes on Thursday, August 28th. >>
    PRIEST LAKE, Idaho - After years of obstacles for 61 Priest Lake lot lessees, the end comes on Thursday, August 28th. People who have been leasing land from the state, some more than 40 years, will find out if they get to keep their property in an auction.Back in 2010, the State of Idaho decided to divest more than 300 lake lots on Priest Lake.
    >>
  • UPDATE: Joan Rivers 'Resting Comfortably' at Mount Sinai in New York

    UPDATE: Joan Rivers 'Resting Comfortably' at Mount Sinai in New York

    Friday, August 29 2014 12:45 AM EDT2014-08-29 04:45:02 GMT
    NEW YORK (AP) - Comedian Joan Rivers is in a New York City hospital, according to police and hospital officials who say she was rushed there from a doctor's office after going into cardiac arrest.Rivers' daughter later issued a statement about her mother's condition.>>
    NEW YORK (AP) - Comedian Joan Rivers is in a New York City hospital, according to police and hospital officials who say she was rushed there from a doctor's office after going into cardiac arrest.Rivers' daughter later issued a statement about her mother's condition.
    >>
  • THROWBACK THURSDAY: Johnny Depp in Spokane for 'Benny and Joon'

    THROWBACK THURSDAY: Johnny Depp in Spokane for 'Benny and Joon'

    Thursday, August 28 2014 4:06 PM EDT2014-08-28 20:06:32 GMT
    KHQ.COM - In the late 80's and early 90's Hollywood came to the Spokane area in a big way. One of the most well known films that was shot in the Lilac city was Benny and Joon. The 1992 movie included Aidan Quinn, Mary Stuart Masterson and Johnny Depp. KHQ was on set for a scene of the movie.
    >>
    KHQ.COM - In the late 80's and early 90's Hollywood came to the Spokane area in a big way. One of the most well known films that was shot in the Lilac city was Benny and Joon. The 1992 movie included Aidan Quinn, Mary Stuart Masterson and Johnny Depp. KHQ was on set for a scene of the movie.
    >>